By Mohammed Isah, technical strategist and head of research at FXTechstrategy.com
GBP-USD: With the sign of a loss of momentum through a hammer formation at the end of Monday, GBP is expected to initiate a recovery higher. However, it seems, based on the current price action, that the bears are not yet ready to relinquish control to the bulls. Nevertheless, we think this will eventually occur, as long as its 2010 low at 1.4248 holds as support. If that level gives in, lower prices will shape up toward its March 2009 low at 1.4112, with a break of there aiming at its big psycho level at 1.4000.
Conversely, above the 1.3535 level, its May 17 high must be broken to trigger its impending recovery and clear the way for more upward action toward the 1.4637 level, its May 14, 2010 high, ahead of the 1.4718 level, its May 11, 2010 low. A breather is expected at this level to turn the pair back down again. Overall, with continued downside vulnerability, threats remain to the downside.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.