Maybe. Maybe the British Pound is staging a comeback. The pair was very bullish yesterday after better than expected numbers were released for PMI Services. The Sterling recovered against the Greenback almost 180 pips from its low yesterday and close much higher than the day before which was bearish. Interesting that the positive numbers came along just as the currency hit a 30 day low of 1.5129 after opening the day at the support area of 1.5150. The pound managed to close above another resistance area at 1.5250 and has since fallen back to the time of writing price of 1.5253. Further resistance can be seen at 1.5340 and 1.5440 (the GBP seems to react to levels ending in 50 so just round up). All that said, the question on traders minds is now where? Is this the start of something Bullish or are we going to fall right back into the 2 week bearish trend? A 4 hour close above yesterdays high could see the bulls regain full control, but back below 1.5250 might see a continuation on the part of the sellers. Support is key again at the round numbers 1.5200, 1.5150 and 1.5100. A break of the latter could see a major tumble in the value of the GBP with little support below 1.5000. One final note, last month’s candle and the placement of the candle form a bullish pattern, so until last months low at 1.5165 is breached once more, we could truly be seeing a comeback by the British Pound.
Happy Trading