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GBP/USD Breaks Below The Key Support Level Of 200-Day Moving Average

January 20, 2013 3:00 am GMT+0  in Chart Alert

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Since September 2011 GBP/USD’s price action has been below 1.6300 except one occasion on April 30, 2012 when it briefly touched 1.6301 but could not sustain and fell sharply. On September 21, 2012 the currency pair had gone beyond that resistance and as high as 1.6309 but     had failed again and had fallen to 1.5828. January 1, 2013 saw GBP/USD to break all previous resistances to go as high as 1.6381 and thereby making the market expectations for possible moves towards the next psychological level of 1.6500.

Break below the the 200-day moving average

GBP/USD breaks below 200 day moving average

The fall came equally sharply and the currency pair broke below the key 200-day moving average. Since end of August 2012 the price action of GBP/USD has been mainly over 200-day moving average and the drop during September 2012 and November 2012 and found a strong support just below that level. The current break of this key support seems like a decisive break.

Previous support and 50% retracement coinciding

GBP/USD retracement levels

The support support on November 15, 2012 had come at 1.5828, It is a coincidence that that support and the support of the 50% retracement of the upward gains from 1.5269 of June 1st 2012 to the recent 1.6381 are now at the same level. The 61.8% retracement of the mentioned upward movement is near 1.5695.

 

 

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Himanshu, by qualification a mechanical engineer with diversified experience of working in Europe and Asia Pacific, has been trading in Forex market for close to a decade. Himanshu also runs one of the fastest growing Forex portal ForexAbode.com which provides free Forex trading analysis, forecast & strategies, free trading tools, education, Forex Blogs and Forex Forum and contributes the analysis to financial and Forex websites like SeekingAlpha.com, MarketOracle.co.uk, ForexStreet.net, CountingPips.com, International Business Times and some more. Contact details: You may please leave your suggestions, comments or complaints using the comment form or write to us using the Contact Us page. You may also connect the author on Google at +Himanshu Jain

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