Chart GBP/USD Update: Volatility giving way to consolidation - gains to remain limited
Consolidation following the test below the 1.2865 Fibonacci retracement and the 1.2843 monthly low of 31 October is giving way to a bounce
| Level | Comment | Level | Comment | |||||
|---|---|---|---|---|---|---|---|---|
| R4 | 1.3100 | congestion | S1 | 1.2900 | congestion | |||
| R3 | 1.3043/50 | 30 Oct (w) high; cong | S2 | 1.2865 | ** | 50% ret of Apr-Sep rally | ||
| R2 | 1.3000 | ** | congestion | S3 | 1.2834 | 6 Nov low | ||
| R1 | 1.2950 | * | break level | S4 | 1.2800 | * | congestion |
Asterisk denotes strength of level
08:10 GMT - Consolidation following the test below the 1.2865 Fibonacci retracement and the 1.2843 monthly low of 31 October is giving way to a bounce, as oversold intraday studies unwind, with prices currently trading back above 1.2900. Focus is on resistance at the 1.2950 break level, but daily stochastics are flat and the rising daily Tension Indicator is also flattening, suggesting any break above here could meet renewed selling interest towards congestion around 1.3000. Following cautious trade, fresh losses are looked for. However, a close below 1.2865 is needed to turn sentiment negative and extend September losses initially to congestion around 1.2800.