GBP/USD: For now, there is a mild positive bias still in play [Video]
|GBP/USD
How Cable reacts around the resistance band 1.2980/1.3050 is the next important move. This band was the old key floor throughout August, and houses all the stale bulls who bought during the last run higher. Now into September, this has become a band of overhead supply of potential sellers. If this rebound is used as an opportunity to sell then the medium term neutral outlook will continue. A range between 1.2760/1.3035 has been in place since the breakdown below 1.2980 was seen last week. With momentum indicators increasingly neutral, how the market reacts to the extremes of this range will define the medium term outlook. A close above 1.3050 is bullish and would be a 290 pip base pattern. A fall back to break 1.2760 would be bearish and imply 290 pips of additional downside. For now, there is a mild positive bias still in play, with the recent rebound and positive reaction from yesterday’s low of 1.2865. Resistance is significant around 1.3000 initially and could be a gauge as to a potential test of 1.3050.
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