GBP/USD Consolidates after Pull Back

<p>GBP/USD (daily chart) has consolidated around the key 1.5250 support level after spending the past three weeks pulling back from its 2015 high of 1.5813 […]</p>

GBP/USD (daily chart) has consolidated around the key 1.5250 support level after spending the past three weeks pulling back from its 2015 high of 1.5813 that was reached in mid-May.

This pullback has given back almost half of the gains made during the recent rebound and partial recovery from April’s multi-year low.

2015-06-08-GBPUSD daily chart


Currently trading between its 200-day moving average to the upside and its 50-day moving average to the downside, the currency pair has been trading in a consolidation since its sharp pullback to 1.5250 support.

Still entrenched within a prolonged downtrend that originated from the 1.7190 high in July of last year, GBP/USD is displaying a bearish trend bias on both a longer-term and shorter-term basis. Lending to this bias is a bearish head-and-shoulders pattern that hints at a further potential breakdown.

Any sustained trading below the key 1.5250 support area could lead to this further breakdown and a subsequent targeting of downside support objectives at 1.5000 and then 1.4800.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.