My last post of a GBP/USD chart before Christmas showed it trading near triangle trend line support. Price action has subsequently broken down through this support and is currently forming up near a potential ‘Double Bottom’ level. Any break of this region though will help to develop the bearish triangle breakout that could be worth up to 1,600 pips.
GBP/USD daily: this was the daily chart as it appeared in my post back before Christmas:
This is the daily GBP/USD chart as it appears now and the triangle breakout has already given up to 250 pips. One can easily see the potential for some ‘Double Bottom support looming though:
GBP/USD weekly: the target for the bearish triangle breakout move is down near a previous low at 1.35. Watch for any support from the 1.46 ‘Double Bottom’ region though:
GBP/USD monthly: watch for any bearish break below 1.46. Price hasn’t made a monthly close below this level in almost 5 years, since May 2010:
This monthly chart has a lot more data and shows how the 1.40 level is crucial too. Note the other triangle support trend line here as well:
USDX weekly: as with other USD-based pairs, watch for any break or respect of the index as it nears the key 100 level as this will impact the GBP/USD.
Summary: watch for any bearish continuation with the GBP/USD triangle move. There is GBP Services PMI data tonight and a lot of US$ sensitive data still to come this week with FOMC Meeting Minutes and NFP as just two. Potential GBP/USD support levels include:
- 1.46,
- the monthly chart’s triangle support trend line and
- 1.40.
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