GBP/USD Breaks Below The Key Support Level Of 200-Day Moving Average
January 20, 2013 in Chart Alert
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
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
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.