April 2nd, 2013
GBPUSD Technical Analysis – 1st April 2013 – Pound Dollar Price Action
by Nick Simpson, Forex-FX-4X
- The longer term (monthly) GBPUSD chart has closed March as a small pinbar/hammer candle. However, we note that price has not managed to close above the key 1.5260 area previous support level, which has already seen a 170-pip rejection on the initial bounce.
- We also note that this price action comes in the context of two previous strong bearish monthly candles and under the longer term ascending trend line.
- The monthly range for March was 429 pips, this represents 75% of the average over two years and is in contrast to the extended 805 pip range seen in February on increased volatility.
GBPUSD – Monthly Chart – 3oth March (Click chart to enlarge.)
- The weekly pound/dollar chart below shows a bullish engulfing candle formed two-weeks ago and has only seen limited upside at this stage; the aforementioned previous support area has capped the price action.
- We also note that this past week has formed an inside candle on the weekly chart.
- The recent price action for the prior 6-weeks has been highlighted for clarity (see top right of the chart).
GBPUSD – Weekly Chart 3oth March (Click to Enlarge.)
- Moving to the daily chart, price is trading close to the descending trend line area around 1.5200.
- A sustained move above this area and 1.5260 could potentially see a squeeze and further covering of short positions.
- The daily 50 SMA is located around 1.5295.
- The next key Fibonacci retrace level is the 38.2% of the main move lower from 1.6347 – 1.4829 around 1.5400.
- Daily timeframe price action around the 1.5260 – 1.5300 area may provide a directional bias, with a move above this zone and subsequent rejection one scenario that may hint at a continuation of the bearish trend.
GBPUSD – Daily Chart 3oth March (Click to enlarge.)