GBP/USD: Watch For Bullish Reversal Following New High
Ian Copsey | Feb 03, 2016 12:10AM ET
INTRADAY CHART: GBP/USD
BIAS: I feel we need a decline to the 1.4240-70 area
Resistance: 1.4426 1.4445 1.4470-79 1.4495-00
Support: 1.4361 1.4325-40 1.4295-00 1.4267-82
MAIN ANALYSIS: Well, that didn't work out. I did note uncertainties in the rally from 1.4148 and yesterday's deeper pullback to 1.4325 and followed by a new high - if by only 1 point - suggested an alternative I had in my mind - that of a 5-wave move. This will mean that today should be bearish and I suspect down to the 1.4240-70 area (allow for 1.4218). As this area is approached, watch for bullish reversal indications for gains to move back to 1.4445 and later - tomorrow or Friday - to around 1.4526.
COUNTER ANALYSIS: Any break above 1.4480 would risk follow-through to 1.4526 - but then take care and note momentum conditions.
A break below 1.4218 would be concerning but not necessarily negative. Only a break below the 1.4148 low would confirm more direct losses.
MEDIUM TERM ANALYSIS:
25th January: While I still have lower targets, there appears to still be a risk of a correction following Friday's gains. The depth of the correction is not really known and much depends on whether Friday's move higher will retain an impulsive move...
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