News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • RT @BrendanFaganFx: 77 counterparties take $1.297 trillion at Fed's fixed-rate reverse repo $USD $DXY https://t.co/bNNI1xoJQZ
  • US Dollar Ascending Triangle: FOMC Forecasts Push USD Breakout Potential https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2021/09/27/US-Dollar-Ascending-Triangle-FOMC-Forecasts-Push-USD-Breakout-Potential.html https://t.co/2jCT8wiMHw
  • Fed's Brainard: - Elevated inflation is driven by Covid-related disruptions - The Fed must remain faithful to its new policy framework
  • Powell implied that the Fed is ready to taper, so long as employment data doesn't significantly disappoint. There's one NFP report before the Fed's November meeting, and it's the one Brainard referenced in these comments. NFP released on Oct. 8th (not this Fri but next) https://t.co/6PmNUEto7F
  • Fed's Brainard: - Employment remains short of the bar for tapering, but may meet it soon - The economy continues to make welcome progress
  • Fed's Brainard: - Labor data for Sept. may be weaker than expected - Delta variant has caused more havoc than expected
  • Fed's Williams: - Inflation did not achieve the 2% target because the Fed acted too soon in the past - If the US defaults, the Fed will not be able to repair the economic harm
  • Fed's Williams: - I don't anticipate a significant increase in labor supply in Sept. and Oct. - I believe the job market will be quite robust in 12 months
  • Crude oil back to resistance - #CL2! chart on @TradingView https://t.co/bwcFB2lpqr
  • Heads Up:🇺🇸 Fed Brainard Speech due at 16:50 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-27
GBP/USD Technical Analysis: RSI Divergence on the 4-Hour

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

James Stanley, Senior Strategist

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