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GBP/USD Reverses at Major Fibonacci Support

GBP/USD Reverses at Major Fibonacci Support

Jamie Saettele, CMT, Sr. Technical Strategist

240 Minute Bars

eliottWaves_gbp-usd_body_gbpusd.png, GBP/USD Reverses at Major Fibonacci Support

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Are you new to FX or curious about your trading IQ?

FOREXAnalysis: The GBPUSD reversed from just below the 61.8% retracement of the 2009 range (1.3500-1.7042). “The idea that price is bottoming for a move back to 1.5320-1.5400 is on track.” Near term, weakness from 1.5221 has taken the form of a wedge (ending diagonal possible) with a slight throwover (quick drop below the wedge support and reversal). Reversals from wedges are often quick and the target is the origin of the pattern (in this case 1.5221).

FOREX Trading Strategy: The quick drop after UK economic releases has been completely retraced. It’s almost as if the market needed to take out the Fibonacci level (1.4853) before it could rally. This kind of tape (drop on news…into a big level…and reversal) is bullish but a rally above Monday’s high is needed in order to improve the chances that the long side works out.

LEVELS: 1.4686 1.4770 1.4830 1.4947 1.5047 1.5131

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.