12 May 2016, GBP/USD
GBP/USD is currently trading with a bearish bias. Yesterday, the pair traded long but could not close above the descending channel. As long as the the pair trades within this channel we expect a momentum to the lower side but should not go below 1.4106. A clear break below 1.4406 will confirm the anticipated downward rally while a clear breakout above the descending channel will lead to an acceleration to the upper side with an ideal target at 1.4663. This pair should be traded alongside AUD/JPY, AUD/USD, GBP/JPY and EUR/JPY. These pairs have a strong positive correlation of up to +0.92 and will likely have a similar price action during this trading day.
If you are not short already, wait for a clear breakout below 1.4406 to go short with your target at the support level 1.43040. A clear breakout this support will call for further short positions with the next target at 1.4106. Only buy upon a clear break above the channel or upon a clear rebound from 1.44061. The long position should have a target at 1.46637.
We are constantly improving our website quality. If you have any suggestions on how to make our website better or noticed an error on the website, please tell us