GBP/USD Weekly Outlook (8/6/09-12/6/09)

In my previous analysis, I have expected a bearish week as we were approaching the weekly 50 EMA and 62 EMA plus a Fibonacci retracement of 38.2% is just about in the same range. Even managed to penetrate slightly above which in my observation, it is just a bullish trap for those who were optimistic buying the currency at that price range.

GBP/USD Weekly Chart

So, enough for last week and let's see what have I observed for the coming week. Last week's highest resistance was at 1.6650 range and support from previous resistance was also broken and now that is the resistance which we need to watch carefully at the 1.6050 price range. The next key support which I spotted was in the 1.5550 price range and that is about 425 pips from the last close during Friday session.

However we also need to watch the intraday support before moving further downwards. We are definitely trading below the weekly and also Monday pivot level and that turns bias to bearish. Interestingly, we might also re-test the broken support of 1.6050 as resistance as in the 1H MACD is showing sign of Bullish Divergence as seen below:

GBP/USD 1H Chart

However, another resistance which will putting pressure for more downward movement are the Moving Averages in the lower time frames. We are currently just slightly above the 4H 100EMA and breaking it the pair might move further down.

As long as we are still trading below the key intraday resistance at 1.6240, we are still going to see further bearish moves in the coming days. Further confirmation for bearish moves is when the pair start to trade below the 1.5880 support level. Trading above the resistance level of 1.6050 and 1.6240, then we might be heading into a bullish continuation trend with confirmation of last week high is going to be taken out.