The week before last the GBP/USD retraced to the 50% level of the Bearish run that lasted for the entire month of May, before heading lower again, and only to be pulled right back up by investors reaction to the EU Summit news as well as fund managers, banks, and private investors covering their positions at the end of the second quarter. The pair then consolidated at the 1.5700 level since opening this week and finally falling again yesterday coming to a halt on the Monthly Pivot at 1.5580. The pair appears to be getting set to head lower, as the Pound loses strength against the American Greenback (USD). For me, this continuation will occur if prices push below last weeks low at 1.5483. The Weekly S1 is in the way at 1.5336 adding a level of support that the Bears will have to break first. If the low breaks, look for prices to test the Monthly S1/Weekly S2 at 1.5386 and then the 6 month low at 1.5267. There are numerous reports out of the Monetary Policy Committee & Bank Of England scheduled for today, which could be good news, but most traders are not expecting much. If the news is good for the Sterling we can expect prices will turn Bullish, at least temporarily as the Non Farm Payroll is always a roller coaster for anything attached to the USD. If prices do trade higher, look for strong Resistance between 1.5850 & 1.5895 before testing 1.6000 becomes a possibility again.
Happy Trading!