GBPUSD Technical Analysis – Further Upside Contained | Forexlive
On the daily chart below for
GBPUSD, we can see that the market is struggling to keep the upside momentum
every time it breaks above the top of the range. The last breakout failed as US
Retail Sales missed expectations across the board and sent the
market lower on fears of an earlier than expected recession.
The buyers though leant on the
red long period moving
average and started charging higher as US
PMIs came out much better than expected and pushed the recessionary fears
further away. If the buyers fail again here, then we may see another selloff
with the moving averages crossing downwards and this time the sellers may take
full control.
On the 4 hour chart below, we can
see that recently the price broke out of the rising channel. The price has been
diverging with the MACD for the whole upside move from
the 1.20 handle. When there’s a divergence, the price generally pulls back
or reverses completely.
Here, the price has been keeping
with the uptrend with large pullbacks along the way, but the breakout of the
channel is a bad omen. The last line of defence for the buyers will be the support level at 1.2344. If that level
breaks, then the sellers can really push the price all the way down to the 1.20
handle.
On the 1 hour chart below, we can
see that the price has now pulled back to the trendline where we have the confluence with the 38.2% Fibonacci
retracement level and the red long period moving average. This
is a strong support zone and the buyers are likely to lean on it to resume the
uptrend. In case the price breaks below the trendline, the sellers are likely
to regain control and push the price first to the 1.2444 support and, on a
further breakout, to the 1.2344 level.