Gbp Usd has made a very violent rally and seems to have topped around the 1.60 level.
Let’s take a look at the daily chart:
I expect it to drop back to the 1.5200 or 1.5000 level in the next week or two, and after that I will have to see whether the action will be up or down longer-term.
It is a little risky but I would like to short 1.56 up to 1.58 with a stop above 1.59
Gbp Usd has made a violent rally after it touched the low 1.40′s level.
Let’s take a look at the daily chart:
To be honest i don’t really know what Gbp Usd is going to do. If you look at 2009 you can see the enormous rally that it made from the 1.40 level, so there is a chance that it could do a similar rally.
However, that enormous rally was after a gigantic decline so it was in proportion.
I feel that there is big resistance from the 1.58 to 1.60 level and after that a pullback to 1.51 should be warranted.
I’m not touching this for a while, going to observe what happens at the 1.58-1.60 level and maybe short there. I will post updates of trades on twitter and on the comments section of this post.
Gbp Usd has made a violent rally in the last 2 weeks and ended this week with a big daily drop from the previous top.
If the previous top of 1.55 holds this advance and a big double-top on the daily chart forms then it is quite possible for Gbp Usd to head back to 1.45 or lower (I expect that to happen).
Short 1.5350 up to 1.55 with a stop above 1.56
Gbp Usd is in a difficult position to call its direction for long term.
The arguments I can bring for more downside is that it is still under its descending trend line from late 2008 and the fact that slow stochastics and RSI are getting to overbought levels on the daily chart.
However, the price is above both its 50 and 100 daily moving average and this creeping upward trend from the low 1.40′s can act as a spring to propel prices higher if Gbp Usd breaks the 1.55 level upwards. If that happens then it is possible to see anywhere between 1.60 and 1.70, which would likely mean that Eur Usd and the Jpy crosses and major indices would also make quite a rally.
For now I still expect 1.55 to serve as a maximum resistance before Gbp Usd heads much lower again.
I want to see what happens next week and short 1.53 up to 1.55. If you can’t handle those wide ranges then wait and see if it gets to the high 1.54 level and start shorting there, with a stop above 1.5550.
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