Forex technical analysis: Targets in the GBPUSD being taken out

5 July 2016, 15:37
Sherif Hasan

Takes out lower trend line on hourly chart.  Timber

The GBPUSD just took out the lower trend line which held briefly at 1.3090 area, and we are seeing further selling as traders throw in the towel. With the price trading at lowest levels since 1985, there is not a whole lot to hang onto.

The pair is trading at levels not seen since 1985. The low  from the week of Sept 13, 1985 was 1.3045. That was a swing low  and not revisited again until - well maybe today. The low is 1.3053. 

The chart below outlines the swing lows/highs off a weekly chart going back to the 1980s. The last swing low at 1.3045. Then there was a swing high at 1.2935 (week of April 19, 1985). Going back to July to September 1984, the lows came in at 1.3010-1.3050 before breaking below the all important 1.3000 level. It stayed below that 1.3000 level until June 1985. 

This is what that area looks like close up

In this type of market, traders start to look where should the price not go above (in this case). The hourly chart break, definitely saw support on the first look, they momentum on the break  below the lower trend line. The 5-minute chart below shows the momentum. 

So for traders technically, the 1985 swing low at 1.3045 is the next target. The 1.3090 area is the resistance (risk) for the shorts.

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