Pound Directionless Increasing Downside Risks
The GBP/USD’s move above 1.5150 last week led me into a long position but with limited follow through it was closed at a small profit. It appears that we have entered a bear market rally which has been supported for the pair as it continues to hold a high correlation with risk trends. Therefore, I will wait for a turn in sentiment and look to take a short position with a break below the 20-Day SMA at 1.4956. However, I can’t discount that more upside potential exists especially considering that the pair is in an ascending channel with a test of the 200-Day SMA at 1.5606 a possibility. A move above the 50.0% Fibo of 1.6455-1.4234 at 1.5341 would lead me to consider a long position.
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