GBPUSD: Loses Upside Steam, Set To Weaken Further
GBPUSD: With GBP testing the 1.7012 level and turning back lower during Monday trading session today, risk of corrective weakness is now building. On the downside, support lies at the 1.6921/20 levels where a reversal of roles as support is likely. A break of here will turn attention to the 1.6850 level. Further down, support comes in at the 1.6800 level with a turn below here targeting the 1.6750 level. Conversely, the pair will have to retake the 1.6995/1.7012 levels to resume its broader uptrend. Further out, resistance is located at the 1.7050 level where a violation will aim at the 1.7100 level and possibly higher towards the 1.7150 level. Above here if seen will aim at the 1.7200 level Its daily RSI is now turning lower supporting this view. On the whole, GBP continues to retain its upside bias but faces corrective weakness.
As it was mentioned in the previous technical analysis of GBP/USD pair dated 2014.05.13, according to the formed technical signs, there was the potential for descending of price which finally happened. Currently price in long term time frames such as monthly and weekly time frames is above 5-day moving average and warns about more ascending in long term interval of this currency pair. According to the formed price movements in the chart, there is a Crab harmonic pattern between the bottom price of 1.66980 and top price of 1.70616 that warns about descending of the price with completion of this pattern ending point. RSI indicator is in saturation buy area and it is in divergence mode with the price chart that warns the potential for formation of a top price and changing price direction during the next candles. Generally until the top price of 1.70616 is preserved, price will have the potential for reformation and descending and If the level of 1.70179 breaks, price will have the potential for descending to the round supportive level (OR R=S Level)of 1.70000.
[B]Technical Analysis of GBP/USSD dated 2014.06.20[/B]
The GBPUSD has pulled back to the 1.7000 level and it may bounce back to the upside from here. The level may become support now.