If y’all can still recall, we had that there ascending channel for GBP/USD in Monday’s intraday charts update.
Back then, the pair was hanging out at 1.2580. But as I noted back then, the pair appeared to be hesitating at the mid channel area. In addition, stochastic was already signaling overbought conditions at the time.
I therefore concluded that the pair may begin pulling back or even stage a downside channel breakout by going down all the way down to 1.2510 or 1.2390.
And as y’all can see, a downside breakout happened all right. So give yourselves a pat on the back, if you were able to ride the pair down. Aww, yea!
Anyhow, the pair eventually found fresh bulls at 1.2390. In fact, them bulls even staged a counter-attack, sending the pair reeling back to 1.2510.
We’re now expecting them bulls and bears to fight it out. However, we are more bearish on the pair, since stochastic is already signaling overbought conditions and all that.
And while them moving averages are still in uptrend mode, they look like they’ll soon be crossing-over into downtrend mode. Also, if we use our handy Fibonacci tool, we can see that the pair is currently at the 50% retracement level, which lines up with 1.2510.
Just remember to keep an eye on how the pair reacts to 1.2390 if or when the pair does get back there.
Also, y’all may wanna think about bailing yo shorts or even switching to an upside bias should the pair surge higher and break past 1.2600.
Back on Tuesday, I pointed out that 1.0880 is a price area with very significant market interest. As such, there was a chance that them bears would use 1.0880 as a diving board for a downside channel breakout.Well, that’s exactly how price action played out. Aww, yea! However, the pair failed to clear the key area at 1.0710 that I told y’all to keep an eye on.
The downside breakout is therefore not yet confirmed.
As such, chances are good that the pair may move back up again.And all the more so, given that stochastic is already indicating oversold conditions and all that.
Just keep an eye on how the pair reacts to 1.0790. If the said price level holds, then them bears would likely try to have another go at 1.0710.
But if the pair easily clears 1.0790, then the next area of interest would be at 1.0880. Of course, the pair could also continue moving lower, although that seems unlikely at this point. In any case, just make sure to practice proper risk management, a’ight?