Watch for agressive bounce to extend higher for GBPUSD
Trading was volatile in Cable on Tuesday. Only minor gains were posted in Asia, but it was followed by a strong renewal of Monday’s selling pressure that confirmed our bearish forecast.
Prices were sold more than 1 ½ big figs to reach their most negative levels for three weeks.
Although all price action took place beneath the 13 day moving average, the lows were equally aggressively rejected. And by the close, the market showed limited net movement.
There are conflicting signals in this price action, but it is the downside rejection that we look for to extend into Monday's net decline.
Management and risk description
A move to 1.3980 means the stop can be raised to break even or better.
Entry: Buy in 1.3953/58 area and at 1.3940.
Stop: 1.3903 offered.
Target: 1.3980, 1.4003 or even 1.4046.
Time horizon: intraday, closing 1600 GMT.
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