GBP/USD retracement from support proves short-lived
‘Super Thursday’ failed to prove super for the pound, with GBP/USD falling back out of the triangle and down to the $1.5467 support level. We have seen a short-term bounce off that level, yet the selling appears to be resuming again this morning.
The question here is whether we will see a move back down to $1.5467 to continue the selloff, or else the creation of a new higher low. I favour the latter and would expect us to remain within this $1.5467-1.5675 range and thus until we break below $1.5467, I would expect some form of recovery, simply due to the significance of that support level. The level is absolutely crucial as it represents the neckline of a possible double top and thus a close below that support level would bring a projected target of $1.525.
So until it is broken, I would be looking towards the bulls to return. Remember that today’s jobs report means the direction of any dollar denominated chart is anyone’s guess come 1.30pm (London time).