GBP/USD rebounds within strong bearish trend
James Chen September 24, 2014 7:14 PM
<p>GBP/USD (daily chart shown below) has rebounded significantly after hitting nearly a ten-month low of 1.6050 two weeks ago. The rebound attempted a breach of […]</p>
GBP/USD (daily chart shown below) has rebounded significantly after hitting nearly a ten-month low of 1.6050 two weeks ago.
The rebound attempted a breach of the 1.6500 resistance area last week, but was unable to hold above that level before quickly retreating.
Despite the current rebound, the trend bias for GBP/USD remains strongly bearish in line with the new downtrend that began in earnest after the retreat from the mid-July multi-year high of 1.7190.
Lending to this bearish bias is the fact that the 50-day moving average has recently crossed decisively below the 200-day moving average, a major bearish technical event that has not occurred since February of 2013.
If the currency pair is able to re-break below the key 1.6300 level, this bearish bias will have been further strengthened. In that event, GBP/USD should once again target the 1.6000 psychological support level, which it came just short of hitting two weeks ago. Any break below 1.6000 should be followed further to the downside by the 1.5900 and then 1.5750 support targets.
To the upside, major resistance continues to reside around the noted 1.6500 area.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.