GBPUSD - Bearish; Trend tested and bounces to 1.5816

Despite initial upside yesterday a sharp turnaround in investor sentiment ended a sequence of two up days. This decline took Cable to test this month’s trend of higher lows and turned momentum bearish. The speed and scope of the fall took prices to oversold extremes and some consolidation has been seen since. There is also potential for profit taking in early trading but we look for bounces to be limited and in view of this our call is Bearish but to leave room to sell a rally to 1.5816. The risk is 1.5855 with an immediate target of 1.5770, yesterday's low.  A move through that point should see the market then focusing on 1.5754, this week's base, or even towards 1.5703, the open from August 21.

The risk is that selling pressure is weaker than currently assessed and this would be confirmed by a move up through 1.5855. Further gains would then target 1.5876, yesterday's top, or even 1.5913, last week's peak.