By Russell Glaser
Yesterday’s drop in the value of the Cable sent the pair below its long term trend line indicating a possible shift in the trend to the downside.
At the end of yesterday’s trading, the GBP/USD finished at 1.5419, a price that coincides with the all-important 200-day moving average. Yesterday’s closing price is decisively below the trend line on the daily chart that extends from the May and June lows of this year.
This indicates a potential shift to the downside for the intermediate trend. The long term charts also show falling trend lines. A close below the rising trend line on the weekly chart will reinforce the shift in the trend. Looking to the monthly chart, falling stochastic indicate further bearishness may be in store for the pair.
A short term falling trend line has been established at the high in November with a reaction point in mid-December.
Price levels that should serve as supports are yesterday’s low at 1.5355, followed by the 50% Fib retracement of the May to November move at 1.5260, as well as 61.8% Fib at 1.5020.
Forex Market Analysis provided by ForexYard.
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