25 May 2016, GBP/USD
Wave Analysis
GBP/USD is currently trading with a slight bearish bias. Yesterday, the pair bounced off from the support zone 1.4480-1.4468, headed long and is still pretty much bullish. Following the break above 1.4543, we are very reluctant to go short, instead, we expect the current downward rally to be a mere pullback and should not close below 1.4543. A clear break below 1.4543 will lead to a rally to the lower side while a rebound from 1.4543 will lead to an acceleration to the upper side but should not go above 1.4729. This pair should be traded alongside GBP/CHF, USD/JPY, GBP/JPY and GBP/HKD. These pairs have a strong positive correlation of up to +0.92 and will have a similar price action during this intaday.
Trade Recommendations:
Remain short but only up to 1.4543. But if you are not short already, wait for a clear rebound from 1.4543 then go long with your target at 1.4729. A clear breakout below 1.4543 will call for further short positions with your ideal target at 1.4304.
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