Technical Analysis – GBPUSD Daily: uptrend continues; possibly eyeing 3-year high at 1.6740
January 22, 2014 10:08 am
(click to enlarge)
As can be seen from the chart, the pound has performed particularly strongly against the US dollar during the last 6 months following the 1.47 low in early July 2013.
Following a 2-year high at 1.6592 on the first trading day of 2014 (January 2nd), the pound has corrected somewhat, making a low just above 1.63. It has since rebounded, topping 1.65 following supportive economic data in the form of stronger-than-expected retail sales data and lower-than-expected unemployment.
On the downside, there are plenty of support points. Firstly, the 50-day moving average is at 1.6335 and the average was tested with success on January 17. Secondly, there is a support zone around 1.6255, as this level presented resistance on two occasions back in the autumn of 2013.
Finally, there is the November 2013 low of 1.5853 and a break below that would almost certainly break the 200-day moving average also and put the entire up move of the pound into serious question.
Current price action is significantly higher than the 200-day moving average which suggests that the up move – although strong – could be overextended.
On the upside, there is the high of 1.6592 of January 2nd and then the 3-year high around 1.6740.
The RSI is looking bullish at 61.5 and trending higher.
Overall the technical picture for the pound is positive and further gains are possible looking ahead.
(click to enlarge)
As can be seen from the chart, the pound has performed particularly strongly against the US dollar during the last 6 months following the 1.47 low in early July 2013.
Following a 2-year high at 1.6592 on the first trading day of 2014 (January 2nd), the pound has corrected somewhat, making a low just above 1.63. It has since rebounded, topping 1.65 following supportive economic data in the form of stronger-than-expected retail sales data and lower-than-expected unemployment.
On the downside, there are plenty of support points. Firstly, the 50-day moving average is at 1.6335 and the average was tested with success on January 17. Secondly, there is a support zone around 1.6255, as this level presented resistance on two occasions back in the autumn of 2013.
Finally, there is the November 2013 low of 1.5853 and a break below that would almost certainly break the 200-day moving average also and put the entire up move of the pound into serious question.
Current price action is significantly higher than the 200-day moving average which suggests that the up move – although strong – could be overextended.
On the upside, there is the high of 1.6592 of January 2nd and then the 3-year high around 1.6740.
The RSI is looking bullish at 61.5 and trending higher.
Overall the technical picture for the pound is positive and further gains are possible looking ahead.
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