GBP/USD Retreats from Trendline Resistance on Thin Holiday Trading

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Today, the fundamental slate is light, and there is thin trading because of bank holidays (Whit Monday) in some European countries such as France and Germany.

There was no important economic releases for the UK or the US. However as we get into the 6/9 US session, traders are giving the USD a boost. GBP/USD slid accordingly.

gbpusd 6/9 4h chart

The 4H chart shows GBP/USD retreating from 1.6850 and a trendline that falls from the 1.6996, 2014-high. Price also held below the 200-4H SMA which was around 1.6830.

Bearish Outlook:
The focus is now on the double bottom formed last week. Breaking below 1.6740 for example, would show that bears are not worried about the price bottom, and is in control. In this scenario, the 1.67 low will be in sight. Below 1.67, the current choppy downtrend remains in play, with 1.66 as the next target/support, as well as the March low at 1.6551.

Bullish scenario:
If price holds above 1.6750 and pushes above 1.6850, we would have a major bullish signal that first opens up the 1.69-1.6920 resistance area. Above that, traders will be looking to challenge the 1.6995-1.70 area for a new high on the year.

GBP/USD Daily Chart 6/9
gbpusd 6/9 daily chart

You can see in the daily chart, that the bullish outlook is favored to the bearish one. The bearish one is choppy, and still in the context of a correction against a major uptrend. The bullish outlook goes with the prevailing bullish mode, which is still intact in the daily chart.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.