GBP/USD Intraday Technical Analysis and Trading Recommendations for January 8, 2013
The GBP/USD pair has been fluctuating heavily within the past few weeks failing to maintain a directional long-term trend. However, the GBP/USD pair started the new year with a sharp bullish move above 1.6300. As we see on the chart, the last push ended up forming an inverted hanging man daily candlestick indicating a false break above 1.6300.
On the 4H chart the GBP/USD pair expressed significant bearish price action reaction towards 1.6300 establishing a significant resistance zone.
Last week, last month’s high at 1.6307 was retested with significant bearish price action, which enhanced the bearish view for the pair.
Consolidation below the Intraday Support Price Zone 1.6125 – 1.6100 is necessary to maintain bearish movement in the short term. However, bullish retracement is taking place this week, which was expected. Price Zone 1.6170 should be watched for bearish price action and a valid SELL entry with SL just located above 1.6220.
The strength of the current bearish movement indicates bearish domination, the bearish bias first focused on the recent support at 1.6100, 1.6050 then 1.5852 support and November’s low will be a key level to break for further bearish outlook.
Bullish retracement needs to consolidate above 1.6060 in order to be able to shoot for higher levels. That is why, the same level breakdown is essential for further bearish movement.
The material has been provided by Instaforex Company – instaforex.com