Will Key 38.2% Support in GBP/USD Last?
04 August 2011
WEEKLY CHART:
The previous break through falling resistance was bullish -but after the 50% recovery level was neared the market slipped. Support from the old falling return line has held so far.
DAILY CHART:
Note how effective dual support from the 38.2% retracement and channel base projection was. The 1.5785 38.2% level remains a key level and a violation of this would signal a more prolonged correction phase underway.
Meanwhile the recent bounce found resistance around the rising old support/return line which we highlighted in the FX Specialist Guide. These lines can be very effective technically, so a pullback from here is no surprise. A drop back to the 38.2% would be a sign of weakness, raising expectations of a break lower.
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