GBPUSD--Thursday, June 25, 2009
On a daily chart we can see some internal price action which would be consistent with an extended Fibonacci pattern working off a base created by the February 9 high at 1.4983 and the subsequent low on March 11 at 1.3652.
The first attempt to break out of the base occurred in mid April. When it failed, the market quickly dropped to approximately the 0.618 level of the alpha-beta base.
This can be seen on a 4 hour chart from April:
When the break-out finally did occur in early May, the alpha level became support. Their was some initial resistance at the minor 1.272 level, but then the impulsive move took off and it quickly rallied to the 1.618 level. There was a quick shart sell-off at that level, but the market soon recovered and powered above it.
A four hour chart from May:
Since then it has traded above the next higher minor FIbonacci level (2.058), sold off, then found support at the 1.618 level and, since then, traded back up to oscillate around the 2.058 level. That brings us to the present.
An 8 hour chart from this morning:
Classically we should expect at least one more push up to the 2.618 level. That would be above 1.71.
But it would not be surprising to see some more weakness before that push to a new high occurs.