GBP/USD Intraday Technical Analysis and Trading Recommendations for February 27, 2012

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GBP/USD Survey according to the Linear Regression Channels over the past two weeks:

-GBP/USD is now testing the upper limit of both channels depicted on the chart.

-presently the GBP/USD pair is approaching the resistance level corresponding to the month high 1.5927 recorded on February 8.

- The last candlestick on 4H timeframe is “inverted hammer” and is considered as bearish.

It is necessary to mention that last week the GBP/USD pair moved within a strong bullish trend and reached these levels despite the strong decline. Therefore, the reverse movement is likely to take place regardless of whether it is short-term or not.
The nearest support levels are located below the current prices near the 1.5840, 1.5750 and 1.5650 levels.




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Last week the GBP/USD pair showed the strong bearish reaction towards the upper limit of the Yellow channel that took place during the last hours of the trading day.

Also the pair has an Intraday support at 1.5805-1.5785 which corresponds to the intermediate line of the Yellow channel and to the lower limit of both Violet & Blue channels.
Bullish Reaction towards this area confirms the tendency and indicates the opportunity of bullish movement.
The breakdown of this area will enable a decline to the lower limit of the Yellow channel located near the point 1.5750.
Based on the previous analysis

The market indicates a bearish tendency at the current price 1.5888 with TP at 1.5835, 1.5805 levels with the next target seen at the 1.5800 level.

In case the support is passed through, the further decline to the point 1.5750 is likely to take place. However, the breakdown of the 1.5927 level will cancel the bearish scenario.

Bullish movement towards 1.5805-1.5785 provides the signal for long positions with the breakdown of at 1.5780 level.