Chart Of The Week: GBP/USD eyes 50% mean reversion – 1.2730s
|- GBP/USD is in distribution below a key 38.2% Fibonacci retracement.
- 1.2780 guards territories to a 50% mean reversion of the early Sep 2019 lows-Dec 2019 highs – 1.2730.
- Bullish correction cannot be ruled out prior to fresh pulse and lower-lows to the downside targetting the 200-DMA sub 1.2700.
The big picture
- The daily chart maps out the downside target as being the 50% and 61% Fibonacci retracements and the confluence with prior support/resistance areas, looking left.
- On the upside, we can see that a break above prior resistance/support structures, the trend-line resistance opens territories above 1.32.
Dec low structure pierced
The December low at 1.2905 was pierced on Friday which is highly bearish and reaffirms the case for a bearish continuation.
Failure at 1.2905 would put the 55-week ma at 1.2805 and the 200-day moving average at 1.2694 back on the plate.
Bullish 50-DMA
However, the 50-day moving average remains bullish and the higher high at the end of Jan following three (1,2,3) lower highs anchor price dynamics to the upside. An immediate retracement towards the 1.30 handle cannot be ruled out prior to a continuation to the downside.
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