Technical Analysis GBPUSD 3 May the 4-Hour

Technical Analysis GBPUSD 3 May the 4-Hour.

Technical Analysis GBPUSD 3 May the 4-Hour. Update 3 May 2016, (Technical Analysis)

Talking Points Technical Analysis GBPUSD 3 May the 4-Hour :

  • * GBP/USD Technical Strategy: Flat, previous long closed at market.
  • A weak US Dollar has brought considerable strength in the Cable, with the 2016 high now in-sight.
Technical Analysis GBPUSD 3 May the 4-Hour.

Created with Marketscope/Trading Station II; prepared by James Stanley.

The Cable has continuing to run higher, breaking higher than the pivotal swing high at 1.4668, and coming back among 120 pips of 2016 high within the pair (set on January 4th). The pair is overbought by several metrics, and 4-hour RSI has begun to indicate signs of divergence as higher-highs are written on price action, because lower-highs are shown on the indicator (shown below).

Again, this is a bearish signal potentially highlighting a nearby turn: RSI divergence is indicative of a warming trend. But at this point, price action does not agree as we’ve seen continued higher highs and higher lows. The level of interest for topside re-entries is 1.4572, which is the 61.8% retracement of the 30-year move in GBP/USD, using the low of 1.0500 when George Soros ‘broke’ the Bank of England with the high set in 2008 just before the Financial Collapse.

Traders could look for topside re-entries should price action move down to find support at this level. Or for those that wanted to look to get long at a slightly more conservative level could wait for support to show at the 1.4471 zone, which is the 23.6% retracement of the most recent major move. If prices put in a concerted break below this support (highlighted with a daily close below this level); then bearish positions may be shortly on the horizon as price action would be in the early stages of showing bearish formations.

Source:  dailyfx.

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