Fan Yang \ 11:30 AM EST \ December 7th, 2009

GBP/USD Showing Signs of Support


* 4H and 1H: The GBP/USD has followed our anticipated decline in the short-term. (Refer to Daily Technical Update 12.03.09 GBP/USD). It has yet to reach our target at 1.6270. Instead the decline paused at 1.6315. It is very likely the pair has completed it’s bearish cycle, and is now ahead of a bullish cycle. The bullish divergence in both time-frames suggest at least a short-term bullish correction.
* The 9AM-10AM candle in the 1H time-frame was an early exit trigger. Since the market is in overall ranging mode, earlier exits make sense rather then waiting for a confirmation.
* The confirmation will come from the rest of the US session, by whether the market will rally above 1.6430-1.6450 area, or continue a decline from this short-term resistance. This resistance, the parabolic SAR, and the declining trendline are all confirmations to exit.
* The next resistance is the 1.6550 area. If this holds, our bearish outlook is still viable.
* Re-consideration of bearish outlook should be in the 15-min time-frame for intra-session plans.
* However a break above 1.6450 signals a reversal back to the 1.6700 area. The 1.6400 re-establishing as support is confirmation for the reversal.

Fan Yang
Currency Analyst
Commodity Trading Advisor
Via fxtimes.com


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