The trend line that connected the last lows (from 14th March 2017 until now) of the corrective rally of GBP/USD is a rather strong diagonal support for the pair. It has been consolidating at it for four days now without being able to pick a direction.
A clear breakout and D1 and W1 bars that close below the trend line would mean a drop to the next support at 1.2600 or even to 1.2550.
In case the bears fail we could see a rally toward 1.2900 – 1.2950.
Meanwhile the potential head and shoulders pattern on the USD/JPY chart did not come to fruition.
The third test of the local low at 108.729 was successful and the pair reached 108.601 mere minutes ago.
There are only a few hours left until the end of the trading week and the strong bears don’t seem to leave any hope for a rally.
I think that if the weekly bar closes as it appears it will – as a bearish pin bar, next week we could see a breakout below 108.129. That will be a significant signal for a strong and long-term drop in the following weeks and even months.
Informative review on current market conditions.
ReplyDeleteThank you for the detailed analysis.
ReplyDeleteExcellent analysis!
ReplyDeleteGood post!
ReplyDeleteGood insight.
ReplyDeleteVery helpful analysis.
ReplyDeleteIt could be a good turning point.
ReplyDeleteGood point! I'll keep an eye on it.
ReplyDelete