GBP/USD Candlesticks and Ichimoku Analysis
|
Last Candlesticks pattern |
Time of formation |
Trend bias |
| Weekly |
Hammer |
8 March 2009 |
Sideways |
| Daily |
Hammer |
30 Mar 2009 |
Up |
Despite holding below indicated resistance at 1.5350 last Monday, once this level was broken, cable quickly surged almost 600 points to Friday's high of 1.5947. This long white candle or should be called as 'Marubozo' signals the rise from 1.3500 low is still in progress and this move is likely to bring retracement of medium term decline towards 1.6135, being 38.2% Fibonacci retracement of 2.0399 to 1.3500, however, upside should be limited to 1.6250 and reckon 1.6390/00 would hold from here and risk from there has increased for a strong pullback to take place later.
On the downside, although initial pullback to 1.5800 is quite possible, renewed buying interest is likely to emerge around 1.5720/24 (a previous resistance level) and sterling shall head north again from there to our indicated upside targets. Only below 1.5515 would dampen this bullish scenario and suggest a temporary top is possibly in place, then correction to 1.5350 (another previous resistance level) would follow but reckon 1.5190/00 would remain intact.
On the daily chart, the pullback was much much shallower than we expected and cable rallied throughout last week to as high as 1.5947 on Friday. Although the British pound closed near last week high, the small 'hanging man' alike candlestick pattern formed last Friday suggests price action on Monday will be critical for this week's direction. If a black candle is formed, then this would suggest a minor top is possibly in place, then correction to 1.5600 would be seen, however, Tenkan-Sen (currently locating at 1.5503) should limit downside and attract renewed buying interest. In the event resistance at 1.5947 is penetrated on Monday, this would indicate recent upmove remains in progress, then headway to 1.6000 and 1.6070/80 is likely but reckon upside would be limited to 1.6135.
In the unlikely event cable drops below the Tenkan-Sen, this would defer this bullish scenario and correction to 1.5400 and possibly 1.5350 cannot be ruled out, however, price should hold well above the Kijun-Sen (now at 1.5171) and as long as key support at 1.5068 (previous resistance) level holds, bullishness remains for upmove from 1.3500 to resume.
|
