The GBPUSD is currently in retracement mode but is still in a strong bearish trend. The BOE was dovish on its last statement as traders expect a rate hike delay in late 2016. Additional GBPUSD tanking was boosted by strong NFP report.
Technically the pair dropped after LVZ pattern was formed ( Low Volatility Zone ) which has historically been shown as a pre breakout consolidation pattern. This time LVZ is a part of POC zone which comes around 1.5170-90 (H3,WPP,61.8, EMA 89) and if the pair rallies to POC we could expect next leg of selling providing that 1.5220 stands firm (78.6, LVZ high). Alternatively the pair could show a T-89 pattern which will be the cue that the price has finished the retracement and is getting back into trending zig zag.
From targets perspective we need to watch important historical levels of support. 1.5025-1.4985 zone is the target zone for bearish move. I have put a Daily chart overlay on the top of intraday to show historical levels of support.
The analysis and the article presents Nenad's opinion. Remember, financial trading is highly speculative & may lead to the loss of your funds. Proper risk management is the Holy Grail of trading.
Recommended Content
Editors’ Picks
EUR/USD flirts with daily tops near 1.0730
The continuation of the selling pressure in the Greenback now lends further oxygen to the risk complex, encouraging EUR/USD to revisit the area of daily highs near 1.0730.
USD/JPY looks stable around 156.50 as suspicious intervention lingers
USD/JPY remains well on the defensive in the mid-156.00s albeit off daily lows, as market participants continue to digest the still-unconfirmed FX intervention by the Japanese MoF earlier in the Asian session.
Gold advances for a third consecutive day
Gold fluctuates in a relatively tight channel above $2,330 on Monday. The benchmark 10-year US Treasury bond yield corrects lower and helps XAU/USD limit its losses ahead of this week's key Fed policy meeting.
Week Ahead: Bitcoin could surprise investors this week Premium
Two main macroeconomic events this week could attempt to sway the crypto markets. Bitcoin (BTC), which showed strength last week, has slipped into a short-term consolidation.
Five Fundamentals for the week: Fed fears, Nonfarm Payrolls, Middle East promise an explosive week Premium
Higher inflation is set to push Fed Chair Powell and his colleagues to a hawkish decision. Nonfarm Payrolls are set to rock markets, but the ISM Services PMI released immediately afterward could steal the show.