Nice Example On Gbp/Usd “How Support Becomes Resistance” |
posted 19:12 11/21/11
Pound is one of the weakest today, down almost 300 pips from Friday highs, currently trades around 1.5600. We anticipated that move, on some basics of technical analysis "how broken support becomes resistance".
Here is the chart and comments that we shared with our subscribers on Thursday, Nov 17th 2011 past week
- Cable broke through the 1.5860/90 support region which could be start of something bigger to the downside, especially if we consider that prices slipped below the support line of a trading channel as well. But notice that even if we still count move from the top in a corrective way, such as double zig-zag, we still need one leg lower (wave (C)) after wave (B) bounce, which may occur in the coming session or two. Alternate count also signals for weakness after corrective retrace into 1.5860/90 area which will now tend to react as a resistance either in wave (2) or (B) wave! "Support becomes resistance; Resistance becomes support". Bottom line: Weakness to come after any pull-back higher, while pair trades below 1.6090!
And here is now the updated chart:
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We are providing technical analyzes for the financial markets and how they behave based on the Elliott Wave Principle. The Elliott Wave Principle gives you a method for identifying at what points a market is most likely to turn. And that, in turn, gives you...
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