GBP/USD capped at $1.5240
GBP/USD extended gains yesterday by making a 130-pips jump. Sterling strengthened on worse-than-expected US data, but found resistance at $1.5240 (38.2% Fibo from a recent decline). On Friday the pair edged lower below the $1.5200 mark.
As can be seen from the daily chart, the pair has approached a strong resistance area around $1.5240/5300 (daily Ichimoku). We would expect the pair to return to the downside from here, but will stand away from shorting until we get a confirmation. Break below $1.5000 would clear the way for a deeper drop. As for the upside, we would start buying above $1.5300. The bearish scenario looks much more likely, in our view.
Chart. Daily GBP/USD