GBP/USD extends correction
Sterling extended its gains and reached $1.5185 in the Asian trade, having bounced from the yesterday’s low of $1.5010. Later in the day the pair edged lower, but holds above the $1.5150 support.
We still expect the market to return to the downside, but will sell only on a break below the key $1.5000 support. Our bearish target lies at $1.4830. Given the bullish engulfing seen on the daily chart, upside correction could extend to $1.5300. Intermediary resistance is seen at $1.5200, $1.5230 and $1.5280. Key support now lies at $1.5150 (23.6% Fibo) - slide below this level would be a bearish signal. Rise above $1.5300 would confirm the double bottom reversal formation, but this scenario doesn't look very realistic these days.
Today traders will focus on the second reading of the US Q1 GDP, which is expected to come unchanged from the first estimate at 2.5% q/q.
Chart. H4 GBP/USD