GBP/USD (daily chart as of October 3, 2013) tested the upper
edge of the uptrend channel (bold green parallel lines on chart) on October 1
and touched a high of 1.6260 with a shooting star candlestick. Current price is
also close to the long-term downtrend line (bold red trend line on chart) that
extended back to August 2009. Potential strong resistance expected around the
intersection of those two major trend lines (red arrow on chart).
Price could turn down to test the lower edge of the uptrend
channel, followed by 1.5950 (September 24 low), and potentially 1.5750 (June 17
high) in the event of an uptrend channel break. If price ignores the mentioned
strong resistance, it could test 1.6260 again and then 1.6337 (January 2 high).
Note that both the RSI and the Stochastic are now in the overbought zones, but
it is not necessarily bearish, as during a strong uptrend, those indicators can
remain overbought.
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