Many of us were anticipating GBP/USD to break above 1.60 level last week after the pair has been consolidating below that level for five days.
1.60 seem to be a level hard to be penetrated despite three attempts to do so. The previous week four attempts were made on 1.60 level.
By Tuesday, it was clearly indicated that the pair is not going to move upward. It break the upper line of ascending channel and move swiftly downward breaching the support at 1.561 and by Friday closing it reached my target T1 at 1.558 and the lower line of ascending channel.
From the close last Friday at 1.5941 to the close this week at 1.5592, cable lost 349 pip. That range was the longest for the past few weeks indicating a strong selling all week for the pair. The downward move was within the descending channel with prices having moved below the 100 EMA.
On Friday, the pair’s opening price was almost level with the closing price an indication of trend indecision, the short term intraday seem to be neutral but medium term look very nervous. I am expecting for early of the week GBP/USD will rebound with resistance 1.583.
Failure to take out 1.583 will bring cable down to initial support 1.54.
