By: Colin Jessup
The GBP/USD has dropped again after retracing to the 1.5700 level last week. Today's bearish candle could be an indication for a re-test of the monthly support zone at 1.5340. Price will need to close below 1.5340 in order to continue its bearish run which started in August. Below 1.5340 we have a technical vacuum with support at 1.5200, 1.4900 and 1.4300. However the weekly Stochastic is indicating that the pair may be oversold and this would fall right in line with the potential double bottom we see forming on the daily chart. If 1.5340 holds and the price turns bullish, look for resistance at 1.5585, 1.5630 and 1.5750. There are several key announcements this week that could weaken the Sterling, ranging from the Construction PMI today to the PPI on Friday which fell 1.9% last last month and is expected to follow suit this month.
Happy Trading!
