GBP/USD Broke Below The Trend Line Support

November 14, 2012 in Forex Analysis

Since the end of May 2012 to Middle of August 2012, GBP/USD had remained in a very volatile sideways range. The price action had broken over that range strongly in August and market had witnessed a very strong upward move for the currency pair. The price had gone as high as 1.6309 which was slightly above the previous high of 1.6301. The break of 1.6301 had given the hopes for further gains but the momentum could not sustain and a strong fall took place.

During all this price action of the earlier volatile moves and then the upward jump, a support trend line had been taking place. The recent moves broke that support line. The price is even sustaining below the same and that surely indicates the built up bearish pressure and bearish outlook.

GBP/USD Weekly Chart

GBPUSD Breaks below the trend line

What is next for GBP/USD?

The 50% retracement is close to 1.5780/1.5785 range. The weekly chart below shows that level but the next chart shows the price action when a similar break of the trend line took place last time.

50% Retracement:

GBP/USD 50% retracement

Price Action After The Previous Break

GBP/USD's previous break of trend line support

The facts that the move could not sustain the previous high and the subsequent fall followed by the break of this mid-term trend line may bring some serious deeper moves. We need to wait and watch.

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