GBP/USD Made A Minor Short-Term Correction
Admirals | Jun 19, 2013 08:06AM ET
On Monday, our analysis stated that the most likely scenario for Cable was an upswing and the setting of new mid-term highs. That is what happened in the middle of the European session, but unfortunately for buyers it was the beginning of the end. At the end of the day, the price formed a Head and shoulders formation (yellow rectangle) and began to fall sharply. Sellers even managed to break the 1.5610 support (green area) but could not stay under this area. This can be viewed as a positive sign and considered as a false bearish breakout that usually leads to a strong bullish counterattack.
The European session today started with the price being still under the neck line (red), but the minimum target for the H&S formation had already been reached yesterday. The scenario for the next hours is rather positive with low volatility. Strong movements should be expected in the evening when the report from the FOMC – the most important news for the USD this month – will be released.
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