Thursday, February 08, 2007 11:13:13 AM
GBPUSD Trend Could Lead To Strong Rebound, Or Significant Breakdown
Thursday, 08 February 2007 13:26:11 GMT
Written by John Kicklighter, Currency Analyst
Following a monetary policy decision that clearly disappointed the currency market, GBPUSD extended a drop that began in earnest hours before. All together, the slide was worth 160 points. In the short-term, such a steep move will likely lead to a profit taking rebound at the least. However, moving out to a higher frequency, the daily chart is providing better argument for significant support. A trendline that begins at the 10/16 low and rises clearly on swing lowers, has recently been tagged with today's low. With today's touch, there is an 8-point confirmation for the trend (which could call into question its ability to withstand future selling momentum). Should the pair begin to rebound, a move to 1.9750 would be an aggressive target as it represents the 61.8% fib of the 1.9918-1.9481 bear wave and has shown significance as resistance a number of times in the past. Conversely, should a daily bar make a respectable close below the big trendline, a first target would be slightly above 1.95, with bigger support seen around 30/40 points below 1.93.
Do you guys see a big inverse head and shoulders on the daily?
Look at the weekly line. Uncanny eh? Do you guys think it will go above it?
Thursday, 08 February 2007 13:26:11 GMT
Written by John Kicklighter, Currency Analyst
Following a monetary policy decision that clearly disappointed the currency market, GBPUSD extended a drop that began in earnest hours before. All together, the slide was worth 160 points. In the short-term, such a steep move will likely lead to a profit taking rebound at the least. However, moving out to a higher frequency, the daily chart is providing better argument for significant support. A trendline that begins at the 10/16 low and rises clearly on swing lowers, has recently been tagged with today's low. With today's touch, there is an 8-point confirmation for the trend (which could call into question its ability to withstand future selling momentum). Should the pair begin to rebound, a move to 1.9750 would be an aggressive target as it represents the 61.8% fib of the 1.9918-1.9481 bear wave and has shown significance as resistance a number of times in the past. Conversely, should a daily bar make a respectable close below the big trendline, a first target would be slightly above 1.95, with bigger support seen around 30/40 points below 1.93.
Do you guys see a big inverse head and shoulders on the daily?
Look at the weekly line. Uncanny eh? Do you guys think it will go above it?
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