GBP/USD 4H Chart 11/23/2012 11:50AM EDT
Bullish surge: The 4H chart shows cable rallying sharply during the 11/23 US trading session. It has already been channeling higher in the short-term but accelerated above the 1.60 handle, 50% retracement. It is now near the 1.6041, 61.8% retracement and a minor resistance pivot. As we approach 1.61, we are entering an area of structural resistance. It is more clearly shown in the daily chart, as a declining consolidation channel resistance.
Consolidation channel: The daily chart shows the attack toward a consolidation channel resistance area. Clearing above 1.61 could be a sign of bullish continuation. Note that price bounced off the 200-day SMA. This is known as a slingshot. Also, the RSI held mostly above 40, maintaining bullish momentum bias. If the daily RSI also pushes above 60, it should reflect a bullish breakout in price above 1.61 and the channel resistance. Otherwise, if the RSI is stuck between 40 and 60, the market is likely consolidating. Still, if you consider the trend since June, the bias is tilted to the upside.
GBP/USD Daily Chart 11/23/2012 11:55AM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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