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Sunday, August 16, 2015

gbp/usd pair opens with false breaks



Sunday opening in gbp/usd pair was marked by two false breaks. The pair initially gapped down, then recovered and made a false push upwards over its Friday resistance point. Gaps are the norm on Sundays; therefore it is advisable not to have open positions in any pairs over the weekend.

I do expect Pound to stay volatile this week and 1.5700 resistance level to be attacked. However, it is smart to wait for European session to begin on Monday and find better areas for entering long or short positions.
Support is around 1.5570 and resistance any number above 1.5660. 

The pair is slightly biased to move upwards. A convincing move below 1.5400 level would negate the bias. If broken upwards the next level of resistance lies around 1.5770 level, followed by 1.5900. If this area is broken we will see 1.6000 even number under siege sooner rather than later.

Market participants have expected rate hikes from BOE, but it seems to me we may expect FED to start hiking earlier than the Bank of England. If that is the case, US dollar might start gaining strength against British Pound at 1.6000 and the low of 1.4564 will come into play. This has yet to be seen. 

gbp/usd 15 minute chart

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