GBP/USD Stalls at Rising Channel Resistance; Buy on a Dip?

by Admin

Awards 2013

GBP/USD 4H chart 4/30/2013 7:35AM EDT

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Rising Channel: GBP/USD has been rallying nicely in a rising channel since the March and 2013 low of 1.4830. As we get into the 4/30 US session, it stopped around 1.5545 and a rising channel resistance.

Near-term top? The 1H chart shows a GBP/USD that has slowed down its rally, and actually put in a lower high during pre-US session. in the near-term there is a support pivot at 1.5417, a break below which shows topping. Also, the 1H RSI should fall below 40 if the market is to lose its bullish momentum.

Support: On the other hand, you might anticipate some support around this 1.5417 pivot, especially if the RSI is also around 40. This outlook would be in the direction of the prevailing bullish trend since March. There is still upside risk toward 1.59, which is around the 61.8% retracement of the 2013 decline. If the market pushes below 1.54 and drags the RSI below 40, we should probably wait until test of channel support and the 1H RSI to test 30, preferably with a bullish divergence before considering the next bullish outlook within the rising channel.

GBP/USD 1H chart 4/30/2013 7:35AM EDT

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