Looking at last month’s commentary on GBP/USD I recall some of my last phrases ‘Looking at the overall picture, suggest leaving the bullet point above as it is - slightly bearish with the possibility of moving to neutral. A one month rally doesn’t turn a market and three out of four MAs still point lower!’.
Well the market was certainly bearish after the then previous Thursday’s Key Reversal Down which followed on until the 18th of Mar! Then of course, the 18th of Mar happened & we had a massive KR Up! However, please note that despite this huge move the market has drifted back down again. This has led to NO KR Up or even a Bullish Engulfing pattern on the Weekly Charts and actually led to a Bearish Engulfing Pattern on the Monthly Chart!
In the last few days the second part of my suggestion seems to have come true – so far! The possibility of moving into neutral as this past week, even though it is a quiet Easter Week, has seen numerous Indecisive Doji Crosses… just waiting for the Non-Farm numbers to emerge from the U.S. This indecision may be false as we are very close to the lows and I have changed at least for the moment the bullet point above to full bearish for the very simple reason that all MAs are now pointing down.
Nevertheless, caution is still advised as there are Indecisive Candles on this chart! Best support is still 1.4687 & 1.4633 – 1.4643 nearby. Beyond that 1.4502, 1.4344 & 1.4231. Topside 1.4984, dynamic at 1.5043 & the key 50% Fib at 1.5092. This last one is very, very important. Two consecutive closes over this & preferably over the next MA (currently 1.5115) as well and the picture would have changed – radically! So on any rally, that’s the level to watch…at the moment!
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