GBP/USD May See Further Losses To 1.6844-72
Ian Copsey | Jul 31, 2014 12:23AM ET
BIAS: While 1.6927-32 caps we should see further losses to 1.6844-72 - take care
Resistance: 1.6927-32 1.6954 1.6965-75 1.6993
Support: 1.6905 1.6888 1.6872 1.6844-57
MAIN ANALYSIS: Losses did move down to the 1.6923-30 projection zone, but the very shallow correction option developed and quickly losses extended into the 1.6880-95 support. There is no hourly bullish divergence, but a 4-hour divergence appears to be developing. This should ideally see the 1.6927-32 area cap for losses to extend to 1.6872 minimum and more likely towards the 1.6844-57 area (max 1.6828.). We shall need hourly momentum to have generated a bullish divergence, and for the 4-hour bullish divergence to have strengthened to provide a basis for a correction higher.
COUNTER ANALYSIS: Only below 1.6820 would see losses extend.
We'll need a break above 1.6954 to suggest the potential for a low having been seen, and for further gains to develop to 1.6965-75 at least - possibly 1.6993.
MEDIUM TERM ANALYSIS:
31st July: Losses have continued and with no real evidence of a reversal set up appearing there is risk of yet another drop. This should have a maximum downside at 1.6828 but could stall just above at 1.6844-57. As long as this develops we should see a correction higher. Being in one of those corrections that can be deep or shallow we shall have to see how this develops. Equally, the depth will provide information for the potential downside projection areas.
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