GBP/USD: technical update
GBP/USD is trading around the last week high of $1.5735 (slightly below 61.8% Fibo). On Friday the pair dipped to $1.5615, but closed slightly above the $1.5700 level, forming a “hanging man” candle. Buyers became hesitant ahead of the Wednesday FOMC meeting: any kind of hints on QE tapering would pull the sterling lower.
The pair is now supported by the $1.5600 mark (highs of early May, 50% Fibo). Drop below thу $1.5500 mark would confirm a short-term top and be a good signal for shorting the cable with an initial target of $1.5400.
Clear break above $1.5735 could create some room for growth. However, their is quite a lot of strong resistance levels ahead. We would expect a bearish reversal from the bottom of the bearish monthly Ichimoku Cloud ($1.5840).
Chart. H4 GBP/USD