GBPUSD Down but not Out
While the current direction for GBPUSD is now down on both the Daily and Weekly charts, the direction on the Monthly chart is still higher, with the July low just below 160.00 the level to watch.
This pair topped out at a near perfect 50% retracement of the sell-off from March 2008 thru January 2009, and has struggled since. Before we get too bearish though, it might be worth looking at the the Pound as the least strong of the majors, instead of the weakest. With the Euro, Franc and Aussie all showing a saw-tooth patterns on the daily charts this past month it may just pay to consider that the Pound is playing it the same, albeit it with slightly lower lows and lower highs compared to the sideways price action of the other majors.
While it’s fair to say GBPUSD and GBPJPY have led recent corrections to the downside, we don’t know yet if these corrections will be followed by actual price reversals, or mark the begining of wider sideways ranges in a much less volatile market place.
Jay Norris
www.trading-u.com
jnorris@brewerinvestmentgroup.com
DISCLAIMER: Futures, options and Forex (off-exchange foreign currency futures and options, or “FX”) trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, options and Forex may fluctuate, and, as a result, clients may lose more than their original investment.