We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The price of #gold may continue to exhibit a bullish behavior in June as the pullback from the yearly high ($1765) reverses ahead of the May low ($1670). Get your Gold market update from @DavidJSong here: https://t.co/OeaYtCpcIo https://t.co/UQVPIVCTCP
  • The $USD breakdown has taken the index into confluence support at the objective yearly open. Get your USD technical analysis from @MBForex here: https://t.co/A16XEv6n4d https://t.co/GzEp3gCAe5
  • US equities continue to run higher with the Nasdaq 100 setting a fresh all-time-high, not even three months after giving back almost a third of its value in about a month. Get your #Nasdaq technical analysis from @JStanleyFX here: https://t.co/1LI54uvI8x https://t.co/e9FvSLqfaA
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/UyQ4i0AihI
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/AJlT2YKeCu
  • USD/JPY is approaching medium-term uptrend resistance and while the outlook remains constructive, the advance may be vulnerable near-term while below confluence resistance. Get your $USDJPY technical analysis from @MBForex here: https://t.co/93D7AyhHtG https://t.co/KQcLLrkMP3
  • AUD/USD has had the most impressive show of trend over the past couple of months with the pair gaining almost 1500 pips from the March low. Get your $AUDUSD technical analysis from @JStanleyFX here: https://t.co/vLz4Rpln3u https://t.co/AOwnJja5V8
  • Has the #Euro been saved? Find out from @CVecchioFX here: https://t.co/eiXfOTyGa6 https://t.co/AyRiYpb4cN
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ygwjGNvS61
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/THWhPAS6AM
GBP/USD Technical Analysis: RSI Divergence on the 4-Hour

GBP/USD Technical Analysis: RSI Divergence on the 4-Hour

2016-05-02 18:00:00
James Stanley, Strategist
Share:

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

In our last article, we looked at a potential bearish reversal pattern in GBP/USD after the pair had run into a stubborn Fibonacci resistance level. As we had written, there weren’t yet enough signs of a turn to trigger the bearish position; but there were enough warning signs to allow for a market closure of the previous bullish position.

Since then, the Cable has continued to run higher, breaking above the pivotal swing-high at 1.4668, and coming within 120 pips of the 2016 high in the pair (set on January 4th). The pair is overbought by many metrics, and 4-hour RSI has begun to show signs of divergence as higher-highs are printing on price action while lower-highs are showing on the indicator (shown below).

Again, this is a bearish signal potentially highlighting a nearby turn: RSI divergence is indicative of a waning trend. But at this point, price action does not agree as we’ve seen continued higher-highs and higher-lows. The level of interest for top-side re-entries is 1.4572, which is the 61.8% retracement of the 30-year move in GBP/USD, using the low of 1.0500 when George Soros ‘broke’ the Bank of England with the high set in 2008 just before the Financial Collapse.

Traders could look for top-side re-entries should price action move down to find support at this level. Or for those that wanted to look to get long at a slightly more conservative level could wait for support to show at the 1.4471 zone, which is the 23.6% retracement of the most recent major move. If prices put in a concerted break below this support (highlighted with a daily close below this level); then bearish positions may be shortly on the horizon as price action would be in the early stages of showing bearish formations.

GBP/USD Technical Analysis: RSI Divergence on the 4-Hour

Created with Marketscope/Trading Station II; prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES

News & Analysis at your fingertips.