Fan Yang
1
All posts from Fan Yang
Fan Yang in Fan Yang,

GBP/USD in a Double Bottom Attempt

The GBP/USD started the week falling to 1.6540. Then it rallied, but was held below a key support/resistance pivot around 1.66. It has traded sideways then, but is starting the 8/27 US session with a double bottom attempt. After another failure to clear below 1.6540, price is now trying to push above the 1.66 handle. 

GBP/USD 1H Chart 8/27

Looking at the 1H chart, we can also see that there is a central pivot around 1.6565. Basically, ability to stay north of this level would be a sign of respect to the double bottom. A break below 1.6560 on the other hand keeps the bearish bias within the short-term consolidation mode, and could be an early sign of bearish continuation.
If the bullish scenario sticks, we will have to monitor the 1.6660-1.6680 area. First of all the double bottom is about 60 pips, so a break above 1.66 projects 60 pips higher, which is to 1.6660. We can also see that the 1.6660-1.6680 area is a support/resistance pivot, and more important, will be reinforced by a falling channel resistance. A break above 1.6680 thus could be a signal for a major consolidation or bullish correction. Otherwise, even if price rallies from a double bottom, GBP/USD is bearish under 1.6660, with downside risk first to the 1.6540 lows on the week, then the 1.6465 low from March.

GBP/USD 4H Chart 8/27