Daily Technical Update
May 14, 2010

GBP/USD Retests 1.45


4H and 1H: Following the post Looking at 1.45 again and Daily Video Technical Update 5.13.2010, we now the market bring the pair down to 1.4495 just ahead of the last US trading session this week.
The 1H chart is showing the GBP/USD in a correction now. The bullish divergence with RSI suggest the timing is right for a correction. In the 4H chart, we see a divergence of a higher scale, as well as a “W” pattern after testing 30.
Before jumping on a bullish outlook, remember the pair is in longer term decline since 2008 and can break lower to test the low of 2009.
We may be in another range now between 1.45 and 1.4750 to start next week. I caution against anticipating a correction all the way to 1.4570, although if improvements in UK’s political front may bring some support for the Sterling for this scenario.


Weekly: Jumping to the weekly chart, we see that the market can break below 1.45 and retest the 2009 low near the 1.38 area.
The RSI shows healthy bearish momentum.
Fan Yang
Currency Analyst
Commodity Trading Advisor

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