Overview:
- The GBP/USD pair is still trapped between the levels of 1.5349 and 1.5438. So, a range around 89 pips is expected today. The level of 1.5349 is representing the daily pivot point that coincides between the ratio of 50% Fibonacci retracement levels and 23.6%. Also, it should be noted that the support set at the price of 1.5340. In the short term, strong support will be formed at the level of 1.5340 providing a clear signal for buy deals with a small target seen at 1.5442 in order to retest resistance. At the same time, the stop loss should be placed at the level of 1.5311. On the other hand, resistance had already placed at the level of 1.5450. Therefore, sell below the level of 1.5442 which represents a ratio of 50% Fibonacci retracement levels with the first target at the 1.5392 price, then It will call for a downtrend in order to continue its bearish movement towards 1.5350 in order to test this strong support (it should be noted that the price of 1.5295 is going to form a new double bottom around the ratio of 23.6% Fibonacci retracement levels).
Observations:
- Major support is seen at the level of 1.5295 on October 6, 2014.
- Major resistance is seen at the level of 1.5442.
- We expect a new range up to 325 pips this week.
- If the trend is upward, strength will be defined as follows: GBP is in an uptrend and USD is in a downtrend.
