GBP/USD edged higher to 1.6256 last week but struggled to get through
1.6259 resistance. Initial bias is neutral this week first. With 1.6115
minor support intact, another rise is in favor. Above 1.6256 will
extend the larger up trend. But based on current momentum, we'd expect
strong resistance at 1.6380 to limit upside and bring topping. Below
1.6115 minor support will turn bias to the downside for 1.5893 support.
In the bigger picture, price actions from 1.3503 (2009 low) are
treated as consolidations to long term down trend from 2.1161. Current
development suggests that it's still in progress. It's possible that
rise from 1.4813 is the fifth leg of a triangle pattern and in that
case, we should see strong resistance below 1.6380 to limit upside and
bring down trend resumption finally. Meanwhile, break of 1.6380 will
indicate that rise from 1.4813 is the third leg of the consolidation
pattern and should target 1.7043 instead.
In the longer term picture, the complicated triangle pattern from
1.3503 argues that it's the fourth wave of the five wave sequence from
2.1161. That means, firstly, 1.3503 shouldn't be the end point of the
downtrend yet and a new low is expected. However, secondly, as the next
fall could be the fifth wave, the breach of 1.3503 could be shallow and
brief from long term point of view and we'll then see a more sustainable
rebound.
Sunday 27 October 2013
GBP/USD Weekly Outlook Report
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