Strategy: Flat
GBPUSD is retesting broken support at 1.5492, the 50% Fibonacci extension, with risk-reward considerations seemingly attractive to enter short, targeting the 61.8% level at 1.5492. However, the extent of recent selling has pushed relative strength studies uncomfortably close to oversold levels and the correlation between GBPUSD and the S&P 500 suggests selling here would amount to little more than doubling down on our existing EURUSD exposure. With that in mind, we will stand aside for now, although a break of triple bottom support at 1.5326 dating back to August 2010 may prove too compelling to resist.
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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