GBPUSD: Support at 1.4800/1.4700, resistance at 1.4915/1.4983

ANALYSIS | 04/21/2015 10:18:20 GMT

I spoke yesterday of the arguable “shooting star” candle formed on Friday. It was not a perfect example of one, but the reversal in sentiment was clear to see. This move has since been backed up by a negative candle yesterday and the corrective signs are building once more. Additionally the Stochastics have now crossed and turned lower which suggests near term bullish momentum has stalled. It is very interesting on the hourly chart because there is the same head and shoulders top pattern on Cable as there is with the euro. The move completed on a breach of the reaction low at $1.4915 and gives an implied target of around $1.4780. I also notice that the near term outlook is being guided lower now by the falling 21 hour moving average (which had previously acted as a basis of support). Once again, as with the euro the hourly momentum has turned more corrective in the past 24 hours with MACD, RSI and Stochastics all in a more negative configuration. A retest of the old pivot level at $1.4800 looks increasingly likely now. Resistance comes around the neckline at $1.4915 and the rally high at $1.49843.

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