Daily Technical Outlook & Trading GBP/USD: Jul 7, 2015

  DAILY GBP/USD TECHNICAL OUTLOOK
Last Update At 07 Jul 2015  00:45GMT

Trend Daily Chart
Up

Daily Indicators
Bearish divergences

21 HR EMA
1.5591

55 HR EMA
1.5595

Trend Hourly Chart
Sideways

Hourly Indicators
Rising

13 HR RSI
51

14 HR DMI
+ve

Daily Analysis
Consolidation with downside bias

Resistance
1.5675 - Last Wed's Asian low, now res
1.5645 - Last Fri's high
1.5629 - Y'day's high

Support
1.5555 - 61.8% r of 1.5510-1.5629
1.5510 - Y'day's low in NZ (Reuters)
1.5488 - Jun 15 low

. GBP/USD - 1.5592... Although cable opened sharply lower to 1.5510 in tandem with euro on Mon, short-covering quickly lifted price to 1.5599 at European open. The pound briefly retreated to 1.5532 b4 rising to 1.5629 near NY midday.

. On the bigger picture, despite cable's rally to a 7-month peak of 1.5930 in Jun, subsequent strg retreat n then weakness to 1.5510 (Reuters) on Mon signals the upmove fm Apr's near 5-year trough at 1.4566 has formed a top there n consolidation with downside bias remains for weakness to 1.5409, then twd 1.5248 later this month, being a 'minimum' 38.2% r n 'natural' 50% r of the entire rise fm 1.4566-1.5930. The prominent 'bearish divergences' on daily technical indicators at 1.5930 n subsequent sharp retreat add credence to this view. Therefore, selling cable on recovery in anticipation of resumption of aforesaid fall to indicated downside targets is favoured. On the upside, only a daily close above 1.5739 signals 1st leg of correction is over but 1.5815 (May's high) would hold.

. Today, as Mon's near 3-week low at 1.5510 was accompanied by 'bullish convergences' on hourly oscillators, subsequent strg rise to 1.5629 suggests 1-2 days of consolidation is in store, so one can sell on upmove or buy on dips.