It’s curious but this pair looks like it has reached a top and – according to my count – has completed 5 waves up from the Jan 10 lows and yet it still stubbornly continues to rise. Today’s rally on low volume, however, is a sign of lack of conviction and could presage a decline. But the latest wave up from yesterday’s 1.3400 lows is too complex to indentify and gives us no clues as to future action. The 1.3575 50% fib line and the R1 pivot at 1.3590 may both provide overhead resistance high turning points. When the decline starts expect support on the way down at 1.3490 and then 1.3390.
GBP/USD: Technical Analysis
Fears that consolidation range might extend to a lower support turned out to be correct. The price tested level 1.5840/35 and is currently retracing upwards. The trading is carried out at 1.5920/30. Indicators are making slack attempts to reverse to growth, but the readings are unclear, which indicates uncertainty in the market. Sideways correction within recently formed levels is likely to continue. The "bulls" seem to have more chances to keep their dominating positions in a medium-term, so we may expect the price to grow to 1.6270/60. Fall below 1.5750/40 will be the first sign of the weakening "bullish" trend, and support 1.5640/50 breakout will become the final signal.
Analysis by: Forex4you.com written by Forex4you analyst
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EUR/USD: Technical Analysis 21-1-2011
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