GBPUSD Top-Down Review

Summary
Weekly: Bearish
Daily : Neautral
4 Hour: Neutral
1 Hour: Bullish


Weekly Timeframe



Price is in a bearish trend, bouncing off the 10 week moving average (black dotted curve on the chart). Indicators show weakening downward momentum. Price has recently failed to make a new low, indicating a consolidation pattern in the range 1.35 - 1.50.

Daily Timeframe



Since late 2008 price has been moving in a downward channel. This week price broke upward from the channel. This channel breakout may be indicative of a change of bias in price action. However, the move is still only consistent with a pullback from the recent low, and the stochastic is starting to look over-extended (over bought). I would like to see a number of events happen to confirm the bias change:

1. Price closing above the 61.8% fibonacci retracement level, at 1.481.
2. A pullback to the upper level of the price channel with the channel line acting as support
3. A break above the swing high at 1.50.
4. A pullback to the 1.50 level, with the level acting as support

Points (2)-(4) are shown as the green projection lines below:



If price re-engages in the channel, then we may see the pair moving down to the 1.30 level.

4 Hour Timeframe



Price is contained within a range is from 1.44 to 1.46. A break above 1.46 will confirm continuation of the recent bullish trend, but may meet resistance at 1.466 before having some clear space to move to 1.50. A reversal in price action requires price to form a new low below 1.44 and a new high below 1.46.

1 Hour Timeframe



Price is contained within a consolidation pattern within a bullish trend. The consolidation range is from 1.44 to 1.46. There is no indication of negative divergence.