GBP/USD - Rolling Over to the Downside, Maybe Setting Up for a Bullish Move Up

By: Doug Rosen

In my EUR/USD Analysis I mentioned that the I see that the EUR has been stronger than the GBP. As strong as it is however, I cannot ignore the fact that it appears to be meeting up with tough resistance. At the same time, the USD/CHF pair is coming up to very strong resistance based on Monthly, Weekly and Daily Pivot Points and it is at reversal pivot levels this resistance may very well cause a weaker USD for today session. The question is will the EUR/GBP have an effect on the behavior of the GBP/USD? A bullish EUR/GBP and a bearish USD/CHF will cause both the GBP and USD to be weak and it is always best to pair together a strong currency with a weak currency. On the daily GBP/USD price is below the 5 ema, this is bearish.



Moving over to the 4 hour chart price has been riding the 5 ema but has met up with the 21 ema and a fight is taking place. Price is crunched in between the 5 and 21 4 hour ema's. Price is also approaching a trend line which i believe will be a very tough nut to crack.



Moving over to the 1 hour chart I can see that price is bouncing off the 50.0 fib of the recent drop and the 5 ema wants to cross below the 13 and the Stochastics is crossing down and back in the trade zone.



Looking at the 15 minute chart price has rolled over below the ema's, however, the ema's are braiding therefore there is no speed or momentum at this time. Price is however, just above the 233 ema so I guess we will just have to wait and see if the 233 breaks. If it does break then we still have the 144 to contend with and there will be strong support at the 1.5710 area since that is the intersection of the daily central pivot point and the trend line. If price reaches that area I would then check to see where the EUR/GBP and USD/CHF is and if I have a EUR/GBP and USD/CHF at resistance then i will have GBP strength and USD weakness and I will feel confident about taking that long GBP/USD long.