Daily Technical Strategist On GBPUSD | FXTechstrategy
GBPUSD: Wipes Out Three-Day Gains, Risk Remains To The Downside.
GBPUSD: Having turned lower ahead of 1.6161 level, its Oct 31’2011 high and sold off strongly to wipe out its three-day gains on Wednesday, risk of further downside weakness is expected. In such a case, the 1.5874/50 zone will come as the next downside support where a reversal of roles is likely to occur and turn the pair back up. However, if violated, further declines should build up towards to the 1.5632 level, its Oct 18’2011 low and possibly lower towards its Oct 12’2011 low at 1.5541. Its daily RSI is bearish and pointing lower supporting this view. Alternatively, the risk to this analysis will be a return to the 1.6161 level where a breach will resume its short term uptrend towards the 1.6204 level, its Sept 06’2011 and subsequently its Aug 30’2011 high at 1.6418. On the whole, the pair may have backed off higher prices but continues to hold on its short term uptrend.
GBPUSD: Halts Gains, Set To Recover Higher.
GBPUSD: With a halt in its decline on Tuesday and a follow though higher in early trading today, further strength is now expected. Note that the pair continues to trade within its range suggesting that its present attempt on the upside is not a full fledged rally. On further recovery, the 1.6138 level will be targeted with a loss of there turning focus to the 1.6265 level and then the 1.6397 level, its Mar 22’2011 high. Further resistance comes in at the 1.6455 level followed by the 1.6720 level and next the 1.6877 level, its Nov’2009 high. On the downside, below the 1.5935 level will resume its weakness started from the 1.6397 level towards the 1.5819 level, its Jan 19’2011 low and possibly lower towards the 1.5700 level. All in all, though retaining its broader bullish structure, GBP looks vulnerable within its sideways trading range.
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