By: Doug Rosen
I will begin my analysis for the GBP/USD briefly looking at the weekly timeframe where I must point out that price has made a series of lower highs and lower lows. On the daily timeframe price continues to ride the 5 ema downward, however, we are 150 pips above a strong support area that has been respected as support three other times previously and I would expect it will be respected yet again, even if price breaks it there will still be some type of reaction before it were to break and it will not be just an easy break, there will be some fight expected around 1.5350 when the time comes.
Moving on to the 4 hour timeframe it is very obvious price broke out of a price channel to the upside yesterday and now price is heading back down to the scene of the crime. When price broke out of this channel yesterday it was the hourly 144 ema that halted price from rising and sent it back downward. I will watch to see what price does when it gets back to the channel. Will it keep falling down and plow through it or will it bounce up and start heading back up? This is what I will be watching for when price reaches the edge of the channel if it even does.
Moving on to the hourly timeframe I can see price has also fallen below a lower trend line and has retested it so I will be watching very carefully if price continues to drop from here. If price were to rise I would expect it to bounce down off the weekly central pivot at 1.5556 and keep dropping but for some reason I expect this pair to continue to drop today.
Finally, on the 15 minute timeframe price has just made a fib from its recent drop and that fib overlaps with the daily central pivot point and I expect this pair to continue to drift its way downward and make its way back within the channel and eventually out of the channel bottom to the downside.