Above is the daily chart of GBP/USD. Should be too surprised seeing that recent bearish trend due to the concerns in Europe and the strength-gaining USD.
I think for medium-term traders, the green line represents an extremely important support level for sterling. Once this line breaks, GBP would be heading to perhaps the previous low in May 2010 which is around 1.423.
But please be aware of any false breakout as well such as that the two candlesticks on 22-sept-2011 and 23-sept-2011. Confirmation is always a critical step when determining any trend changes.
Apart from the trend line, I have also added a Pitchfork and a retracement.
The retracement is straight-forward. The pound reaches its 50% retracement level and the supportive force seems to be quite strong here. Next level would be 61.8% which is at around 1.520. These are important support levels.
Pitchfork looks beautiful on this chart too. The false breakout was coincidentally at the interception of the green line and the lower line of Pitchfork. That's the reason why the buying force was such strong that kept pushing the price back above the two lines, forming a false breakout.
Therefore, actually we can see that the supportive forces are quite strong currently. I don't think sterling would plunge easily and break all these levels. There should be some rebound following.
Extremely strong resistances are found at around 1.578, given by both the retracement and Pitchfork.
No comments:
Post a Comment