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GBP/USD - Clear Bounce Off Extreme Lows

Posted on January 28, 2009 at 14:42 in Analysis by James Chen

GBP/USD (a daily chart of which is shown) has made a clear 3-bar bounce off the recent 23-year low of 1.3500, as of Wednesday morning. In the process, price has broken back up above the bottom border of the wedge formation that it broke below just last week. Price action has now reached the level of the last significant swing low in the pair before the 23-year extreme low was hit. Are we now seeing a major bottom occurring in the pair? Momentum still appears to be to the upside, and any continued bullishness that breaks above the 1.4400 region should provide more strength to the bottoming outlook. If a break above this level occurs, price could eventually target the 1.5300 region to the upside. And any substantial move above this further resistance level should provide stronger confidence that a reversal could indeed have begun. Of course, major support to the downside continues to reside in the 1.3500 extreme low region.

4 Responses to “GBP/USD - Clear Bounce Off Extreme Lows”

on 28 Jan 2009 at 4:13 pm1St_Fx

Hi James,
Yes its clear bouance off from low 1.3500,and some trend and momentum indicator’s pointing its bullish, it might be possible that market come to test broken support around 1.4350/75 of Dec31 and Jan02 low’s 1.4350/75 and Hit the hourly trend line ressistnace from Jan08,09,16 high, what is your’s view we might be see some more bearish as the ressistance of 1.4375 hold’s or in the prespective of FOMC Statment.
Thank’s
on 28 Jan 2009 at 4:36 pm2St_Fx

Europen and US equity markets bouance as well with good margin
on 28 Jan 2009 at 5:21 pm3St_Fx

And what’s your view for eur/gbp bullish out look , this decline form 0.9517 is this a correction or promote euro berish out look.
Thanks
on 28 Jan 2009 at 9:59 pm4James Chen

Hi St_Fx!

Thanks for all your insightful commentary and questions. I will get to that pair and post my analysis on this blog soon. Thanks, St_Fx!

James Chen

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