Price & Time: Almost Time to Sell the Pound?
- GBP/USD at important cyclical inflection point
- Eyeing reaction at key Fib level for signs of a secondary top
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
GBP/USD is entering a critical cyclical period over the next few days. The exchange rate is in the midst of an aggressive rally since finding support earlier in the week at the 1.6460 161.8% projection of the late February decline. On the surface this move higher looks to be a resumption of the uptrend in place since July of last year. Cycle analysis, however, warns that this is a potential ‘bull trap’. A variety of different cyclical relationships, including one related to last year’s low, converge over the next few days. With the Pound moving higher into this “turn window” we believe the risk is for some sort of secondary top to develop. The 61.8% retracement of the mid-February to March range at 1.6685 is an ideal turning point and we like selling around there. Only unexpected persistent strength over 1.6685 after Monday of next week would signal that Cable has weathered the cyclical storm and is headed higher
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GBP/USD Daily Chart: March 27, 2014
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in Coming Sessions:
LEVELS TO WATCH
Resistance: 1.6680 (Fibonacci), 1.6745(Gann)
Support: 1.6560 (Gann), 1.6460 (Fibonacci)
Strategy: Sell GBP/USD
Entry: Sell GBP/USD at 1.6675
Stop: 1-day close above 1.6745
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail firstname.lastname@example.org. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.