Tuesday, March 15, 2016

GBP/USD Is about to Test 1.41

From all the currency pairs I have been observing carefully since the beginning of this week, the most clear signal of reversal showed up in the GBP/USD daily time-frame chart in the early hours after the market opened on Monday.

This tiny doji candlestick under the strong resistance signified by the Bollinger Bands indicator (the blue line) and the ЕMA 89 (the green line) was a signal that the pair will not continue moving to the upside.
GBP/USD has been dropping for two days now and the obvious target is the level of support at 1.4150 – 1.4100.

According to my previous experience in situations like this, the pair should bounce off that level temporarily. At the moment it’s difficult to determine how long this retracement will last, and how high it will climb. We have to wait and see what candlesticks will form at the support level.