GBP/USD Has The Pullback Started?
This morning’s Average Earnings Index released this morning with a result of 2.5% just as expected, this has pushed pound slightly higher against the US Dollar. We have seen this pair swing from a downtrend into an uptrend in the past few weeks after a rejection from the support of 1.32500.
After making a recent higher-high at 1.34700 on Thursday last week, the following day Friday we watched this pair pullback to the downside. This morning it seems we have found support at 1.34400 that lines up with our golden 61.8% fib level. On the 4-hour time frame, we can see there have been many tests of this 61.8 level, so far proving its strength. As we wait for further bullish movement, we can see that our D1 target is just above our monthly level at 1.35000 that we can now consider our next target.
However, if we do break lower than 1.34400 this move could change to a larger reversal to the down.
Soon we have USD CPI data that could cause further volatility this afternoon, followed by tomorrow’s GBP CPI and USD FOMC statements that will be high impact....