GBP/USD: Resistance In 1.5560/75 Area
Carol Harmer | Aug 15, 2013 02:21AM ET
Another reason why August markets should not be traded! 1.5420 held the downside and buyers grabbed the reins and drove us higher for 1.5560 overnight highs. There is still divergence evident on the daily charts and unless we break above 1.5575 there is a good chance of us trading lower this session.
The first stop on a break back below 1.5475 would be 1.5420 once more. Here it is likely that the sellers would be looking to cover short positions. Buyers would be temped in at these lower levels and thus it is looking like this support will hold the downside. However this is only is 1.5420 can hold - failure sees 1.5380 quite quickly.
So we have resistance in the 1.5560/75 area. If there are no pullbacks and the market makes a break above 1.5575 and holds there our first stop will be 1.5606 but more scope for 1.5620/30. Here we would expect some profit taking and thus this should hold initial move higher. If however we cannot hold below this resistance there is a good chance we will trade higher for 1.5685...
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