GBP/USD Candlesticks and Ichimoku Analysis
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Last Candlesticks pattern |
Time of formation |
Trend bias |
| Weekly |
Shooting star |
5 Aug 2009 |
Up |
| Daily |
Hammer |
3 Nov 2009 |
Sideways |
The British pound continued to move lower after breaking indicated support at 1.5832, price then fell below support at 1.5708, confirming a downside break of indicated range of 1.5708-1.7044 has taken place and almost reached our suggested target at 1.5500 (yesterday's low is 1.5535). As the chart showed a weekly close below the Ichimoku cloud bottom, suggesting a stronger retracement of the rise from 1.3500 towards 1.5412 (100% projection of 1.6879 to 1.5832 measuring from 1.6459), however, reckon 1.5272 (50% Fibonacci retracement of 1.3500 to 1.7044) would hold on first testing.
On the upside, whilst a return move to 1.5708 and possibly 1.5832 (both are previous support) cannot be ruled out, renewed selling interest should emerge around the Ichimoku cloud bottom (now at 1.5931) and bring such a decline to aforesaid downside target. Only a weekly close above the Tenkan-Sen (now at 1.5997) would suggest low has possibly been formed and bring test of the upper Kumo (now at 1.6149), however, it is necessary to see a breach of the Kijun-Sen (now at 1.6207) would confirm but resistance at 1.6459 should hold from here.
On the daily chart, despite recovering to 1.6070 last week, the British pound ran into heavy selling pressure right at the Tenkan-Sen and cable tumbled from there, the decline then gathered momentum once indicated support at 1.5832 and 1.5708 were penetrated, price then dropped sharply to as low as 1.5535 yesterday. This selloff confirms the downside break of 1.5708-1.7044 range has taken place and further weakness to 1.5500 and possibly 1.5412 (100% projection of 1.6879 to 1.5832 measuring from 1.6459) which is likely to hold on first attempt.
On the upside, expect initial recovery back to 1.5708 (previous support turned resistance), however, renewed selling interest should emerge around 1.5832 (another previous support) and bring such a decline. Only a daily close above the Tenkan-Sen (now at 1.5905) would suggest a low has possibly been formed and bring test of the Kijun-Sen (now at 1.5997), breach of this line would confirm, then stronger retracement of recent decline towards the Ichimoku cloud bottom (now at 1.6157).
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