After a strong first few days for GBP/USD when prices broke down through the bottom of the Sep 2014 Schiff Pitchfork they settled within a few days thereafter to a sideways move established by the 50% Fib of the 2009 move as resistance (1.5265) and the then recent lows between 1.5050 – 1.5075. Even Francogeddon failed to cause much impact! However, on the 22nd of Jan we had a Key Reversal Down after a previous pretty Indecisive Doji Cross.
This ought to have started the next phase down on what’s clearly a bearish market & the next day we did – slowly – but enough to establish a new 2014 low!
Yet this failed the following day & prices bounced up to almost test the 1.5265 resistance again but pulled back at the last moment. Despite all four MAs pointing down as well as all Lines, suggest the market is taking a breather and perhaps in the very short term is closer to a neutral stance than these factors may lead us to believe.
Though the Fib at 1.5265 is good resistance, just below that we have the 61.8% Fib of the same move at 1.4846 & at 1.4811 we have the Jul 2013 low!
These are the reason prices took a reversal back up on the 22nd and we actually ended the month with another Indecisive Doji Cross on the Daily Chart above. So – is this a breather for another attempt lower or is it finally turning back up. To be honest I cannot tell as yet as both reasons for support & resistance are good. I’ll therefore keep the bearish point above but I’ll put a question mark against it just in case.
If 1.4811 goes then there is little until 1.4344…or just ahead of it! Topside currently has resistance at 1.5332 & combined around 1.5421. Finally, I draw your attention to the crossover between the 2nd—6th of Apr—still too early but worth noting!
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