The GBP/USD, along with other major currency pairs has moved lower in this morning’s early FX trading session, following Friday’s surge higher for the US dollar, which saw it break out from recent sideways consolidation on the daily dollar index chart. This bullish momentum for the dollar, has continued during the London session with both the euro dollar and the pound dollar adopting a bearish tone on the daily chart, with Cable now looking set to move lower in the short term.
The isolated pivot high on Thursday has helped to add some additional momentum to this morning’s price action with the GBP/USD testing the 1.5975 price level at the time of writing, and with an isolated pivot low in place at the 1.5900 level, this now looks set to be the next target for the pair. Above, we have a strong level of resistance now defined by the two pivots in the 1.6175 region, with the lower level of the price congestion, now defined at the isolated pivot low at 1.5913, and if this level is breached, then expect to see the pair move lower, to test the next level in the 1.5750 – 15800 region.
Our trading indicator confirms this bearish picture, and is also reinforced with buying volumes on the daily chart now having disappeared, to be replaced with selling on Friday. The three day chart has seen consistent selling volumes throughout much of October, and with the three day trend also now in transition from bullish to consolidation, the longer term trend for Cable also appears to be moving to bearish, and if confirmed, then we can expect to see a deeper and sustained move lower for the pair in due course.
By Anna Coulling