Today, we're taking a look at GBP/USD and sharing our analysis on the pair as well as trade ideas.
Here we got GU on the daily chart. Using the fib, you can see that prices respected that 78% and 61.8% level on the chart. Analysts said that the break in the 1.2504 level confirmed their bearish thought according to fxstreet.com. They also say that a break below 1.2400 will be another sign to sell the pair. For trades on the daily, you could look at resistance at the 61.8% fib level where it respected it before and resistance level formed as well. GU may look to break out of the wedge too and close underneath. Sell targets could be placed at 1.28150, 1.25166 or 1.23050 (sell stop).
Here's GU on the 4H chart. It recently hit support and bounced up while resistance lies around 1.24545. Very clear trend lines forming to the downside on the pair and will probably continue to respect them. Key targets on the 4H chart are: Sell at 1.24545, 1.23903, and 1.23482.
On the 15 min chart, we see some buying pressure and think prices will likely continue up until it hits 1.23780s level. Some broken support turned to resistance and will likely run into more selling if prices reach here.
As you can tell, we are pretty bearish on pound dollar now as US markets sell off today. Multiple short entries are forming on various time frames indicating that we are in a pretty strong downtrend. Because GU is so correlated to US indices, we're watching trader sentiment on the US market which has been bearish off news today. We expect the market to close in the red and for GU to follow. Next week, I will most likely still have my bearish thesis on both the market and this currency pair until we see signs of a reversal or great news comes out. Banks were hit hard yesterday after the Fed's announcement on giving them certain monetary and stock limitations. I am continuing to look for shorts in the meantime.
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