GBP/USD - Retracement to the Upside Appears to be Developing

By: Doug Rosen

This pair has been extremely bearish but I keep saying that a retracement is long overdue. Finally, I think the retracement is finally coming together. On the weekly chart price is still slightly outside the lower Bollinger Band. The weekly 5 ema is about 250 pips above, yet it is crossing below the 55 ema which is bearish in nature and this pair is bearish but just needs to go up a bit to gather its energy for continuation to the down side. Price recently breached 1.5750 but this is a strong visual support area and I am sure profit taking is occurring since yesterdays daily candle has a rather long lower wick.



The Daily Stochastics is also in the oversold zone. Looking at the 4 Hour it appears price is bouncing off the lower Bollinger band and angle and separation between he 5 and 13 ema's has decreased. We could soon find ourselves trapped in a bit of consolidation if the 5 doesn't cross above the 13. Looking at the hourly chart the lower Bollinger Band is pointing up, price has slightly wicked above the 21 ema and it looks like the 5 ema wants to cross up. Price is sitting just on the Daily Central Pivot Point with the 15 minute ema's below price appearing as though they want to give price a lift.



I do expect this pair to continue to rise up a bit, however, it will have some fight along the way. The hourly 55 ema is only 30 pips above as I write this analysis. The 4 hour 13 ema is also in that same area. The 4 hour 21 is crossing just below the monthly S2 at around 1.5816 so expect some resistance at those levels. The 15 minute 144 ema is at 1.5780 area as well.
I would consider waiting for price to fall a bit, probably down to the 1.5730 region before bouncing back up. If price was to rise I would expect to see it rise to around 1.5800 area which is where the Daily M3 and the 233 ema are overlapping so that would be my target.