Trend to Resume in the Pound?
- Minor cycle turn window here
- Nearing important Gann support
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
The next 24 hours or so are important for GBP/USD. If the price action over the last few weeks has only been a consolidation within a broader uptrend then from a short-term cyclical perspective this is about where the exchange rate should try to turn up again. While the break of the 38% retracement of the February range near 1.6600 this morning is clearly a negative, we view the 2nd square root relationship of the year’s high at 1.6560 as the more critical level. If the uptrend is to resume soon then this is the level that needs to hold (on a closing basis). A move back through 1.6635 is needed to relieve immediate downside pressure and signal that a turn is indeed beginning to unfold. A clear break of 1.6560, on the other hand, opens the way for a deeper decline into an important turn window seen around the end of the month.
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Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in Coming Sessions:
LEVELS TO WATCH
Resistance: 1.6635 (Gann), 1.6730(Gann)
Support: 1.6560(Gann), 1.6530 (Fibonacci)
Strategy: Buy GBP/USD
Entry: Buy GBP/USD at 1.6600
Stop: 1-day close below 1.6560
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail email@example.com. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.