GBPUSD – Bearish Evening Star illuminates Sterling’s downside

A Bearish Evening Star formed
Following Wednesday’s indecisive price action sentiment turned significantly bearish for Sterling Thursday with the most negative daily performance of this month. This fall confirms the importance of the capping of demand at a key 50 percent point of the decline from April’s high The market also fell short of testing the daily Ichimoku Cloud – both of these factors are inhibiting the topside. Most importantly Thursday's price action completed a Bearish Evening Star pattern on daily candle charts – a 3 candle negative formation that often signals a change in investor opinion of value. The extent of the decline means intraday signals are oversold and there is real potential for some initial profit taking. We look for intraday rallies to be sold into and this negative pattern to dominate GBPUSD in the days ahead. We look for 1.5463/76 and 1.5372.