Thursday May 13, 2010 - 21:17:18 GMT
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Fxtimes: Daily Technical Update GBP/USD: Looking at 1.45 Again
Daily Technical Update
May 13, 2010
GBP/USD: Looking at 1.45 Again
- 4H: The GBP/USD is sliding faster than the EUR/USD this week. Perhaps it is just catching up. In any case, there are a couple of strong bearish signals over the past European session.
- The last couple of 4H candles broke below a rising minor trendline as well as a minor low near the 1.4750 area. A pullback may offer further confirmation.
- The RSI broke below 40, as well as the previous low. Price action is strong and is eyeing the 1.45 area. 1.4450 is the actual pattern breakout projection, but the almost 200-pip tail from a 5/7 candle suggests this area has strong bullish forces, at least last week.
- Still, looking at the weekly, we see more room for the current bearish attempt even below 1.45.
- Weekly: The weekly chart shows that the 1.45 area is the 78.6% retracement of an upswing from April 2009.
- RSI is bearish as well as price action. We see that if the market breaks below 1.45, it may retest the former low at 1.38 area, all the way down to 1.35, which is the low in Jan, 2009.
- The last time the GBP/USD was round this level was in 2002.
- Structural issues in Eurozone and UK on top of its hung parliament provide the reason for outflow from these currencies and investments in these currencies.
- The greenback is benefiting from this form of risk aversion.
Commodity Trading Advisor
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.
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