GBP/USD Chart 4H 6/21/2012 1:53PM EDT
The 4H chart shows that the pair is about to test June’s channel support near 1.56, which is also a previous resistance pivot. Also note that the RSI reading here is at 40. A break below it suggests loss of the bullish momentum established in June. and with price below 1.56, this in term opens up the possibility of a bearish outlook toward 1.5450, then the 1.5280-1.53 June lows.
Although price action and 4H momentum has not shown a bearish signal just yet, the 1H chart shows that bearish momentum is already building. IF we get a rally that fails to push back above 1.57, we are likely to continue developing the nascent bearish momentum into a stronger signal to the downside.
Also, if the RSI fails to push back above 60 and falls back below 40, we would also add weight to the bearish oultook.
GBP/USD Chart 1H 6/21/2012 1:57PM 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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