GBP/USD Technical Analysis – WC 7th January 2013 - FX Price Action Update
- The GBP/USD currency pair has printed a weekly engulfing candle (see fig 2), following on from the daily pinbar rejection at key 1.6300 area resistance earlier this week.
- Pound/dollar ended the week just above the previous 27/12/12 1.6074 swing low after finding interim support around the 61.8% Fibonacci retrace of 1.5826 > 1.6347 at 1.6025.
- Friday’s daily low of 1.6007 was unable to tag the round number. Cable bulls have managed to hold the pair above the psychological 1.600 handle for now. This is also an area where the ascending trend line drawn from the July and November lows is currently located. A sustained break under the low from Friday, and the bearish engulfing candle low, could potentially see increased pressure on this pair and would be a constructive technical development.
- Any corrective move to the upside brings the following areas as potential resistance: 1.6131 (the 31/12/12 low), 1.6200 with two associated daily candle highs from last week and the key 1.6300 area prior resistance.
- The 1.5913 area is a clear price pivot zone on the weekly chart and an area we will monitor in the event of extended cable downside.
- This week’s Commitment of Traders (COT) report data shows the British Pound Sterling (CME) at +36K futures contracts on the 31st December versus +37K previous according to the latest data from the Commodity Futures Trading Commission.
GBP/USD Daily Analysis Chart – fig 1
GBP/USD Weekly Analysis Chart – fig 2