GBP-USD Recovers on a Hammer Candle

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( fxtechstrategy.com) - The pound vs. dollar are showing a hammer-generated recovery off the 1.5326 level triggering a fresh upside gains in early trading today. Hope of further gains is developing. This would put the GPB-USD pair on the path of further recovery toward the Sept. 30 high of 1.5661. A breach there will turn risk toward the 1.5713 to 1.5779 levels. However, we expect these levels to cap gains and then turn the pair back lower in the direction of its medium-term downtrend.

Further out, resistance stands at the 1.5863 level, representing the Sept. 15 high. On the downside, a return below 1.5270, its hammer candle low will resume its medium-term downtrend toward the July 18 low of 1.5122 and possibly lower toward the big psychological support of 1.5000.

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 The Professional Suite 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.