GBP/USD – Head and Shoulders

by Admin

Awards 2013

GBP/USD 4H chart 4/17/2013 8:00AM EDT


Head and shoulders: The GBP/USD could not extend higher toward 1.5411 after an initial breakout of a brief correction pattern. During the 4/17 session so far, the failure was followed by a sharp drop that is completing a head and shoulders by the US session.

Momentum: The RSI held under 60 and is about to break below 40, which would show loss of bullish momentum. The next key level for the bearish outlook will be around 1.5150, close to the rising channel support. A break below the channel support then opens up first the 1.50 psychological handle, and then the March and 2013 low at 1.4830.

Overall bullish structure: Although the market has lost momentum, it holds overall bullish structure above 1.5150. After a couple of corrective downswings, if the market can then hold above 1.5150 and push back above 1.53, the bullish outlook can be revived.