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GBP/USD: Expect Decline To The medium Term Target Area

ByIan Copsey
Published 07/12/2013, 03:17 AM
Updated 07/09/2023, 06:31 AM
EUR/USD
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GBP/USD
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NOTE
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BIAS:

Cautiously I feel this can move lower…

Resistance: 1.5211-21 1.5244 1.5284-03 1.5321
Support: 1.5170 1.5140-45 1.5120-25 1.5099

MAIN ANALYSIS: I am struck by the divergence between the strength in EUR and lack-of strength here. It appears to be more indicative of a slightly different in ternal structure in the decline from 1.5750. I would much prefer if this declines directly - but should allow for 1.5244. I am also not entirely convinced that we'll see losses to new lows directly, so we'll need to observe how any losses develop. We shall need a break below the 1.5140-45 pivot support - and ideally 1.5099. If seen then look for losses to be maintained down through 1.5060-65 and 1.5017-40. Note support around 1.4981-17. Below is a much deeper retracement around 1.4880-10.

COUNTER ANALYSIS: Only an earlier break back above 1.5244 will see extension to the 1.5284-03 area, where I suspect a correction is possible. Above 1.5310 would imply a move up to 1.5340-45 - note 1.5400-10.

MEDIUM TERM ANALYSIS:
July 12: Having taken the day to consider the situation and the sheer lack of strength, I am beginning to consider the potential for the 1.5221 (max1.5244) to be only a correction. If so, then we should see direct losses but the extent is unclear as we're in a position where we could see a triangle develop. The triangle should support around 1.4880-10 and then continue in a range. This may make more sense while the EUR and CHF complete their moves. Overall, we should expect the decline to the medium term target area.

Above 1.5250 would send it higher, but it'll need to play catch up with the EUR/USD.
Note resistance at 1.5340-45 and 1.5400-10.

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