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Talking Points

  • GBP/USD breaks 200-day moving average again
  • Larger topping pattern in play?

Unfamiliar with Fibonacci Relationships? Learn more about them HERE

GBP/USD: Turns Down Sharply From Timing Symmetry

Price & Time: GBP/USD – Turns Down Sharply From Timing Symmetry

The important highs in GBP/USD since June (with the exception of the September high) have been quite remarkable from a timing perspective. As I have highlighted several times over the past few weeks, they have coincided with important timing related to the July 2014 high and April 2015 low (Read HERE). To quickly recap - the June high occurred at 25% of the amount of time between the two, the August high occurred at 50% of the time elapsed between the two, the late October high occurred near 70.7% of the time between the two (Sacred Cut ratio important in the proportion of a square) and to cap things off this past Monday’s high occurred at nearly 75% of the amount of time between the two. A fine example of hidden order in the market. If this is indeed a topping process like I have suspected (Read HERE), then the broader downtrend should reassert itself here shortly.

Today’s break below the 50% retracement of the April – June advance and last week’s lows around 1.5250 has triggered a minor double top on the daily chart that projects a potential move towards 1.5000. However, the bigger picture level on the downside for me remains the October lows around 1.5100. I think traction below there would confirm the Gann “Rule of Four” top/Euro fractal I have been eyeing and set the stage for a resumption of the broader downtrend in the pound. Strength back through 1.5400 would force a rethink, but only traction over the 1x1 Gann angle line of the 2014 high around 1.5500 would turn the technical outlook positive.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter @KKerrFX