GBP/USD To Correct To 1.587
FBS | Sep 16, 2013 06:30AM ET
GBP/USD is consolidating in the $1.5960/30 area. The pair has started this week with a gap.
As the market still expects the Fed to taper bond purchases this week and the GBP is overbought in the short term, we expect this gap to be filled. The pound will correct to $1.5870/30 (bottom of the gap, middle Bollinger® band on H4). As the general pound trend is bullish (the pair has settled above June highs), we expect the bulls to keep pressure on the upside.
Sterling will test $1.5980 and possibly the psychological resistance at $1.6000. Resistance at $1.6035 and $1.6050 should be a ceiling in the coming sessions. We recommend buying GBP on the dips above $1.5830.
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