Strong Downtrend on GBP/USD

DailyForex.com Team

By: Bastian Rubben

The holiday in Wall Street gives the major currencies opportunity to correct some of their declines against the USD. However, the correction is not that strong and the investors are waiting for the opening bell tomorrow. Analyzing the different charts of the pair GBP/USD helps to understand the intensity of the current bearish session in the market.

GBP/USD Analysis - November 24, 2011

A negative signal for the pound appeared on the daily chart last week, as the 20 EMA crossed below the 50 EMA, which means that prices are getting lower. Many technical traders who spot the cross of the EMAs are getting prepared for additional declines and therefore most of the chances that we will see the pound shedding more points against the USD. The pair has been moving in a channel since the current session begun on October and reached the lower boundary of the channel, which means that the short-positions holders might cover their position and cause a correction from the current levels. However, the strong down-trend lives no doubts regarding the GBP direction and a break-down of the current support at 1.55 will open the way for the 52-week low at 1.527.

This can be seen well on the 4-hour chart of the pair. The “lower-highs” pattern started since the pair reached the pick at 1.617 and found the support at 1.55. The most interesting thing here is that the bearish session began after a strong up-correction that occurred on the previous months. The meaning of those events is that the buyers are currently out of the game and the sellers are on the upper-hand, even if the pair corrects from this point. 

GBP/USD Daily Analysis - November 24, 2011

DailyForex.com Team
The DailyForex.com team is comprised of analysts and researchers from around the world who watch the market throughout the day to provide you with unique perspectives and helpful analysis that can help improve your Forex trading.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.