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Looking for rallies to be sold in GBPUSD

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Looking for rallies to be limited in GBPUSD this week with the medium-term bias switching to negative on selling rallies.  

 

Monthly: Likely to post two Inside Harami candles, a clear sign of investor indecision.

IG GBPUSD M.png

 

Weekly:  Moving higher in a bullish channel formation. Although we have reacted lower from the 50% pullback level of 1.4346 (from 1.7192-1.1500) there is no clear reversal formation and dips continued to find buyers. Trend line resistance is currently situated at 1.4554. Bespoke resistance is seen at 1.4406, just above the previous high. We look for this level to hold back buying.

 

Daily: We have seen a reaction lower from the 161.8% extension of 1.4168 (from 1.3710-1.4168). If GBPUSD breaks the previous high we are likely to see bearish divergence, the oscillator making a lower high (while the price makes a higher high), often a sign of exhaustion.

IG GBPUSD D.png

 

We are looking at selling at 1.4400, stop 1.4600, with a target at 1.3810

 

In regards to the PIA analysis, no representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.

 

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