Signs of Weakness Start to Appear in GBP/USD

The FX Specialist view - From this year’s May low a good recovery in GBP/USD has been seen, but bull fatigue is starting to show and the latest slip back is retesting first key support. A break of this would temporarily sideline the bulls.

• WEEKLY CHART The bounce off the 76.4% pullback has so far failed just ahead of the 76.4% recovery level. A further setback looks quite likely before any further attempt on this resistance.
• DAILY CHART: In the FX Specialist Guide we have been looking at the bull channel base projection which helps to gauge market momentum. It has begun to fail as support, putting bulls on a cautious footing. After a s/term bounce (resisted around the 50% rebound level, not shown) the slightly lower 38.2% pullback has come under scrutiny again – this is viewed as the key level, with break below to herald a deeper correction phase. This then initially open up the 1.5294/65 area, 07-Sep low and 50% pullback, where next s/term support seems likely. Overhead resistance is offered by the early Aug high around 1.6000, ahead of the 1.6094 19-Nov high.

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