Technical Analysis: GBPUSD hourly: range trading near 2-year high from sterling
December 20, 2013 11:02 am
(Click to enlarge)
Both the pound and the dollar have seen positive fundamental developments during the past few trading sessions.
As a result the recent fresh 2 – year high registered by the pound against the dollar did not result in follow-through buying and the pair remained roughly in a trading range pattern.
The high of the previous 8 days was around the 1.6433, whereas the low was at 1.6217. The high could act as resistance if the pound rallies to that point – about 1 cent above current price action at 1.6335.
Respectively, the low around 1.6217 could become support on a down move.
Currently there is a short-term bearish bias, since price action is below the 21-period exponential moving average.
The MACD is also bearish as it has turned negative and also the MACD indicator is below its red signal line.
On a longer-term daily horizon, sterling is still in an uptrend unless it breaks through the 1.5880 area on the downside, a level which has been tested around three times in October and November and held successfully.
To sum up, sterling did not have enough momentum to continue the string of new highs. The underlying trend is positive however, and it will be interesting to see to what extent this correction will continue.
(Click to enlarge)
Both the pound and the dollar have seen positive fundamental developments during the past few trading sessions.
As a result the recent fresh 2 – year high registered by the pound against the dollar did not result in follow-through buying and the pair remained roughly in a trading range pattern.
The high of the previous 8 days was around the 1.6433, whereas the low was at 1.6217. The high could act as resistance if the pound rallies to that point – about 1 cent above current price action at 1.6335.
Respectively, the low around 1.6217 could become support on a down move.
Currently there is a short-term bearish bias, since price action is below the 21-period exponential moving average.
The MACD is also bearish as it has turned negative and also the MACD indicator is below its red signal line.
On a longer-term daily horizon, sterling is still in an uptrend unless it breaks through the 1.5880 area on the downside, a level which has been tested around three times in October and November and held successfully.
To sum up, sterling did not have enough momentum to continue the string of new highs. The underlying trend is positive however, and it will be interesting to see to what extent this correction will continue.
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