Richard Perry
Independent Analyst
GBP/USD
The acceleration higher in the recovery on Cable has been remarkable. The two strong positive candlesticks that ended last week added over +550 pips as the volatility remains enormous. Incredibly, the recovery has been almost as fast as the sell-off just a couple of weeks ago. The hourly chart shows a little retracement in the move this morning, but the bulls still have control. There is a slight caveat into the European session with small negative divergences on hourly RSI. However, throughout this recovery of the past week, the intraday weakness has been bought into. It may not look like much on the hourly chart, but there is an area of good support $1.2125/$1.2300 for the bulls. Holding above 50 on hourly RSI would maintain a sense of strength in the recovery, but losing 40 (along with MACD lines below neutral) would suggest renewed selling pressure. Resistance has been found at $1.2500, but as we noted last week, if this can be cleared there is little real resistance until $1.2725/$1.2765.
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