By Dan Eduard – For today’s technical analysis, we will be looking at the daily chart for GBP/USD. As can be clearly seen, the pair has been experiencing a bullish trend for sometime. A close look at several indicators will show that this trend may be soon coming to an end.
The technical indicators we will be looking at are the Bollinger Bands, Relative Strength Index (RSI) and the Stochastic Slow.
1. The Bollinger Bands have already begun to widen, indicating that a price shift is likely to take place. As we can see, the price ticks are currently right along the upper band, telling us that the price shift is likely to be downward.
2. The Relative Strength Index shows the pair trading well into overbought territory. Traders can take this as a sign that downward pressure may occur in the near future, lending support to our original theory.
3. The Stochastic Slow shows a cross has formed above the upper resistance line. This is typically a sign that a downward correction will occur. This supports our original theory of an impending bearish move.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
