Send me real-time posts from this site at my email
Fan Yang

GBP/USD Completes a Price Top

Last time we saw GBP/USD, it was testing a falling resistance at around 1.36.  We noted that price might become sticky around 1.36. In other words we anticipated consolidation. The 4H chart shows that price indeed has been consolidating around 1.36 in a sideways range. This week, price broke below the range support that was aroudn 1.3450, completing a price top.

GBP/USD 4H Chart

(click to enlarge)

There are some bullish lingering in the 4H chart:
1) The RSI is still above 40, which shows maintenance of the bullish momentum.
2) Price is still above the 200- and 100-day simple moving average.
There are bearish signs too:
1) The price top we mentioned reflects an end to an upswing, and a possible start to a bearish correction.
2) There was a strong bearish engulfing candle in the 4H chart during the 9/26 session. This shows that the market is not respecting the range support, and has bearish bias in the very short-term.
1) There might be support in the 1.3325-1.3350. 
2) Below 1.33, we should limit the bearish outlook to 1.30. A hold above 1.30 shows GBP/USD is still intermediate-term bullish. Otherwise, we are in a medium-term uptrend that is simply taking a medium-term consolidation/bearish correction
3) I would also look at the RSI and anticipate a bullish divergence between the RSI and price. This should help hone in on the timing of a subsequent rebound and potential bullish continuation.

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue