GBPUSD: Closes On A Hammer, Set To Recover Higher

GBPUSD: With a hammer candle starting a corrective recovery on the daily chart the past week and seeing the pair reduce its earlier losses to a marginal one on Friday, further confirmation of that recovery looks to be triggered as another hammer candle formation(bottom reversal signal) is now in place on the weekly time frame. Having said that, GBP now has to build up on its Friday positive close and then firmly break and hold above the 1.5150/65 levels, its Feb 26’10 low/Mar 05’10 high to resume its corrective recovery initiated from its 2010 low at 1.4782. This development will turn focus to its strong resistance located at the 1.5343 level, its Feb 19’10 low where a cap may turn the pair back down in line with its medium term downtrend. Above there will bring the 1.5574 level , its Feb 23’10 high into focus. On the other hand, the pair must break and hold below the 1.4782 level to annul our corrective to consolidation view thus resuming its medium term downtrend towards its April 26’09 low at 1.4511 with a loss of there targeting further downside weakness towards the 1.4396 level, its April 19’10 high.

Mohammed Isah
Market Analyst
www.fxtechstrategy.com

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