The Sterling Hunts for a Bottom

GBP/USD (1.5675)

• Resistance Levels: 1.5725, 1.5810, 1.5944
• Support Levels: 1.5530, 1.5380, 1.5940

The GBP/USD is looking for a bottom near 1.5580 and a chance to correct higher. Please see the above MT 4 daily chart. Note the formation of a morning star candlestick, which is a bullish reversal sign. We need a daily close back above 1.5725 in order to challenge the next technical level at 1.5810. Alternatively, if we should fail and see the Sterling push lower, then we need a daily close back below a congestion area marked at 1.5530 to 1.5588. If this happens then we will challenge the next support level at 1.5380. This is a key support level, if it breaks then the GBP/USD will challenge 1.5940 and lower.

Looking at some trading strategy today: we are trading too close to a resistance level to consider entering a long trade. Simply, does not make sense from a risk to reward perspective. There are no clear bearish reversal signs yet. However, let’s look at the below 4 hour chart. We are noting a possible bearish reversal pattern. We need to confirm this with a daily close lower. With this said, I am opting to stand aside and watch for a bit longer before making any decisions.

As always, trading strategies are for education purposes and do not constitute trade advice. Always do your own technical analysis to support my own.