GBP/USD: Bulls Have To Mount A Defense
Jason Sen | Aug 20, 2014 07:43AM ET
The GBP/USD has hit the 23.6% retracement level of 1.6630 from the whole 1 year rally from a low of 1.4812 in July 2013. This therefore is enormously important support and the best chance bulls have to mount a defense after 7 consecutive weeks of losses. It is worth trying medium term longs here with the risk vs reward heavily in our favour. We need wider stops than usual below 1.6600. Just be aware that the 'stop hunters' could try to push the pair lower today forcing out weak longs, before squeezing prices higher. However a break lower would trigger a lot of stops in the market and target 1.6555/50.
If we get the bounce we hope for today we should target 1.6640 then 1.6665. We should struggle here today but if the pair can continue higher perhaps later in the week we should see 1.6690/1.6700.
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