Supported or not? (2010-07-16 GBP analysis)

Thanks to the weaker Consumer Confidence and slump in revenue of GE, US markets plunged hardly again. Most currencies follow the slump too. Such volatility is really favorable to traders. So let's see how we can trader the pounds.



Above is the 1H chart for GBP. The price breaks the cyan pitchfork already. It is now testing its support zone. So is it likely to break the zone and free fall? When we look at MACD, the two lines are heading downwards, just break through zero. However, the support zone is quite a large area and the MACD is already quite low in value. I would anticipate a horizontal move in this range after dropping till the bottom line of the zone. So this trading range 1.5221 - 1.5287 would be the trading range for us. Then when MACD moves back upwards and might go near zero, GBP may suffer a further drop afterwards.