GBP/USD: Increasing bearish potential

by Admin

Markets maintain the range today, with investors still favoring dollar and yen sells across the board. European currencies hold to recent gains, and consolidate near the weekly highs although in limited ranges: GBP/USD has barely moved 30 pips since Asian opening, with a daily low so far at 1.5307. There is little schedule data around until US afternoon FOMC Minutes, so expect market to remain pretty much in range until then. As for stocks, Nikkei advanced to a fresh high, European indexes are also in positive territory, while US futures also heading strongly up towards new record highs, all of which keeps safe havens under pressure.

The GBP/USD however, seems unable to advance and the 4 hours chart continues to show signs of exhaustion to the upside, as momentum stands around its 100 line and RSI turned flat around 62. 20 SMA continues to offer dynamic support around daily low, while a short term trend line caps the upside around 1.5340. 

Unless a break above 1.5360 weekly high, there’s an increasing bearish potential in the pair, with an acceleration below 1.5290 favoring a run towards 1.5220/30 area, 200 EMA in the 4 hours chart.  Gains above 1.5360 on contrary, should anticipate a test of 1.5410 price zone.

View Live Chart for GBP/USD