During the last month Cable is swinging back and forth mostly influenced by
the greenback’s volatility. Last week GBP/USD was seen higher but bulls reacted to the
served fundamental with retracement and since then the pair entered into
bearish channel, clearly seen on the four hour time frame. During the past
hours Sterling gained strength and again was tempted by the psychological 1.40 level following the neutral FOMC minutes
that switched off greenback’s strength. On the same chart RSI and stochastic
resumed direction towards south are both are close to extreme oversold
conditions. The 20-day SMA is showing stong bearish momentum and is developing
in parallel with the above mentioned channel. It will be interesting to observe
how the pair will react to the vicinity of 1.3880, a support area provided by
the downside of the channel. On the other hand tomorrow the UK GBP numbers are
due and this could bring back bulls in the game.
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