GBP/USD: Trend Down?
Eddie Tofpik | May 07, 2018 06:30
GBP/USD: Trend Down?
'It was the Weekly Key Reversal Down three weeks ago wot did it guv'.
Apologies for the Cockneyisms but it was clearly indeed the Weekly Key Reversal Down three weeks ago that trashed the market lower and caused the fall down through the Medium MA (currently 1.3885), the recent 50% Fib at 1.3700 and most recently the first close below the Long MA (currently 1.3542), a test (though no closure under yet...) of the Jun 2017-to-date Uptrend (currently 1.3500) and finally the Dead Cross of the Short MA (currently 1.3953) down through the Short/Medium MA (currently 1.3974).
All the broken areas which were supports are now resistances. So what now? Well, unlike EURUSD, we are quite away from the Target for the large Double Top formed over 2018 at about 1.3125. It seems as if we are following the lead lower of EURUSD but somewhat lagging in time. We've support in between at 1.3453 as well as the congestion area as a whole 1.3450 - 1.3300 plus the Uptrend still there. However, the Target for the Double Top would still be lower and most interestingly in amongst an area of congestion and support that may well slow if not halt any further moves lower.
These are support areas at 1) congestion between 1.3250 - 1.3050, 2) the key 50% Fib of the whole of 2016's move at 1.3233 and 3) the 50% Fib of the key 2017 - 2018 move at 1.3177. They may very well be enough to slow and/or halt the tries lower. However, unlike EURUSD, there's no clear H+S plan for what's next and so...should we get there...we'd need to reassess what would be the next move. Topside, you'd need consecutive closes over the Medium MA to negate this move lower at this time. Bullet point goes into mildly Bearish.
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