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GBP/USD Intraday Break-Out Approaching

Last updated 2/13/2009 12:58 PM EST (GMT -5) 0 Comments - Add your comment

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FX360 Technical Analyst Staff

Technical Analyst, GFT

The USD/GBP has been consolidating since coming off this morning's intraday low near 1.4360. A break above the bear trendline (in red) will most likely lead to a bullish continuation up to key intraday support near 1.4511 (61.8% of XA) or 1.4553 (78.6% of XA). Both levels reflect the completion of bearish Gartley patterns in which a bearish reversal is likely to occur. In this case stops would be set just below point C near 1.4390, and profits taken just below fib resistance (gartley completion).

However, if bull intraday trendline support is broken (blue line on 5min chart below) then a bearish break-out is likely to converging fib support to at least 1.4324 defined by the 127.2% fib extension of XA as well as a 127.2% ABCD extension. Additional support lies at 1.4280-70 on 161.8% of XA, a 161.8% ABCD extension, and 127.2% of the rally to the intraday high of 1.4606. A move to either level of support would complete a bullish butterfly pattern in which case there is higher probability for a bullish intraday reversal. In this scenario, stops would be placed just above point C near 1.4345, and targets just above fib support (butterfly completion)

5min Chart - Break above bear trendline (red) likely to lead to resistance and bearish Gartley pattern completion at D	5min Chart - Break below bull trendline (blue) likely to lead to support and bullish butterfly pattern completion at D

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