My Pips Are Growing
- Rep Power
Weekly analysis gbp/usd
Compare to EUR/USD, the Cable encountered a different type of bearish pattern in 2011. As represented above on our chart, a bearish saucer is in place, with its first resistance placed at this stage around 1.60/1.61. Dow Theory is currently positioned on the downside, confirmed early January with a new low scored at 1.5230 - pushing previous high pivot from 1.6620 to 1.6170. As long as this specific level holds (1.6170), we remain bearish on this currency pair.
In other words, current rally is seen as an opportunity to short the sterling at higher level. The first logical resistance is set at 1.5780/00 (more details on daily comments), while the 1.60/1.61 area sees the saucer pattern's resistance.
Only a move above 1.6170 would invalidate current bearish cycle on cable, reversing Dow Theory and piercing the saucer's resistance in the process. We still favor at this stage further correction on the upside - due to daily oversold condition - before the long-term downtrend resumes. As a matter of fact, a sideways activity - inside 1.54/1.59 - is seen at this stage as the most probable scenario. Above 1.58, we warned a deeper upside correction would take place, opening the door for a test of 1.60. This look to be the scenario for next week. And after? Beware the bull
See on our blog the chart
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