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Pounding on Pound, GBPUSD makes new lows

Market Analysis
GBPUSD

Gold rallies, Japanese 20 year bonds slip to the negative territory and GBP slips new lows in the Asian session. Yesterday it seemed for a while that the 1.30 round number was going to hold as cable rallied almost 100 pips from the level. Now GBPUSD has tested 1.28 region and rallied strongly from the low print of 1.2998. The pair created a hammer candle yesterday after the strong move lower. This suggests that the move was over extended and the market is looking to rest. However, due to the recent volatility and the resistance levels above the pair could provide intraday opportunities.

At the time of writing the pair has reacted to a resistance area between at 1.2934 and 1.2948. This area coincides with a down sloping trendline and the upper 15 min Bollinger Bands. Market has also created bearish shooting star candle in the 15 min chart. This suggests weakness. I am looking for sell signals between 1.2920 and 1.2950 with target one at 1.2895 and target 2 at 1.2840. Price is now trading inside my sell area.

Edit: GBPUSD rallied through my sell area without giving a sell signal. Currently the market is trading near levels that supported price yesterday at around 1.30. Market could experience weakness at this level I’m looking for short opportunities again as I don’t believe the GBP related problems and worries are over. But before committing to a view that the market turns there needs to be price action based evidence of this happening. There should be plenty of volatility ahead. I have time to time been commenting the market moves live on my Facebook page. For my live commentary on please follow my Facebook page: HotForex.JanneMuta

Edit: Target 1 at 1.2940 and my target 2 at 1.2874

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Janne Muta

Chief Market Analyst

HotForex

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