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GBP/USD November 12th – Technical Analysis Update

GBP/USD November 12th – Technical Analysis Update

GBP/USD November 12th – FX Technical Analysis Update

(Forex-FX-4X, 12th November, 2012)

  • On Friday the GBP/USD currency pair experienced a sell off from just above the key psychological 1.6000 handle (1.6020 area highs) to print a fresh 2-month low around at 1.5887.  This had cable closing below an ascending trend line and the previous 1.5900 area support lows, as marked by the 38.2% Fibonacci retrace level.
  • When referencing the daily time frame chart below, we note there is a potential long term double top developing with the 1.6300 range highs closely aligned.
  • Last weeks statement from the Bank of England (BOE) had the central bank holding rates at the record low 0.50% level and the asset purchase facility at £375 billion.
  • A continuation of the previous week’s risk-off tone and associated investor uncertainty could see the US dollar (along with the Japanese yen and gold) gain further on safe haven flows.
  • Any downside would be trading into the 100 and 200 day SMA (simple moving average) levels which converge around 1.5860, with the corrective risk of a reversion to the recent range if price can not push below this dynamic potential support zone.
  • An extended move lower as the new week progresses could see a retest of the previous resistance area around 1.5780, with the 50% retracement level closely aligned.  This area capped the GBP/USD upside, from June to August, and may now see some form of support if price moves lower.  We also note that there is a possible third touch of the embryonic trend line (no third touch yet) in this area, adding further confluence.
gbpusd flag 300x80 GBP/USD November 12th   Technical Analysis Update
GBPUSD Daily Chart

gbpusd november 12th1 GBP/USD November 12th   Technical Analysis Update

Related terms: Pound/dollar analysis, Sterling news, GBPUSD forecast.

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