GBPUSD bears appeared to have an argument with yesterday’s pattern reversal, but today’s action throws things back into doubt a bit, as does the fact that we’ve yet to break critical downside levels. The most obvious downside levels on the standard daily charts were the 1.5250/70 area that was the previous high earlier this month and was also a major range low stretching all the way back to 2010. A bit of close inspection on the 4-hour chart shows that we’re not quite there yet and that the downside argument doesn’t come into full swing until we’ve taken out the 1.5200 level, though the pattern is still fairly compelling as long as we keep below today’s highs. To the upside, the range high is the obvious bigger resistance, with a possible extension toward 1.5500 if it can’t keep the action contained in the near future. So I will look to react to a strong pattern bullish reversal for initial longs (swift move back through 1.5360/80 late today or early tomorrow, with more longs on a follow through the 1.5412 high. On the short side, I’ve lost tactical confidence here, though if I was short, I would look to abandon ship above 1.5325.
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