By Greg Holden – On the technical charts, the GBPUSD is one of the first pairs to begin showing signs of a correction to last Friday’s sharp upward movement. The chart below is the hourly chart by ForexYard. The indicators used are the Relative Strength Index (RSI) and MACD/OsMA. The Fibonacci Retracement lines were also drawn to indicate significant support/resistance levels.
– Point 1: The pair has recently touched the significant 76.4% resistance level on the Fibonacci and hurriedly bounced off into a downward posture.
– Point 2: The RSI shows this pair currently floating just inside the over-bought territory, signaling downward pressure.
– Point 3: The MACD/OsMA shows a fresh bearish cross which may indicate an impending bearish movement.
– Note: the pair remains inside a bullish channel and has not yet breached. There is a possibility that the downward correction will still maintain this trend.
In this case, it would be wise to place tight Stops and Limits on the pair, but be ready to remove your Limit if this pair’s price drops outside of its uptrend as this may signal a much stronger downward movement.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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