GBP/USD FX Technical Analysis – 4th January 2013
- The GBP/USD currency pair has seen extended downside following the pinbar reversal setup we covered in yesterday’s technical update. The dollar has gained broadly as the EUR/USD likewise plummeted following the bearish outside day setup and a subsequent break under the recent range lows.
- Cable is now trading near the 27/12/12 1.6074 daily low, which was taken out yesterday evening post the more hawkish than anticipated FOMC minutes. This represents a break of price structure and a move under this higher low.
- Any continuation of this bearish GBP/USD price action would need to break below the 61.8% Fibonacci retrace of 1.5826 > 1.6347 in the first instance at 1.6025 with the 1.6000 round number just below. An ascending trend line is located just under this level as per the daily pound dollar chart below.
- Yesterday’s trading range came in at a significant 196 pips which marks a major increase in volatility and is almost triple the 60 day average of 66 pips. In the event of another major leg down the 1.5913 area has acted as a price pivot since August and is an area we will be monitoring going forward.
- Any correction higher has the following areas as a potential resistance focus: 1.6131 (31/12/12 low), 1.6200 with two associated daily candle highs from last week and the key 1.6300 area prior resistance.
GBP/USD Technical Analysis – D1 Chart – 4/1/13