FXStreet (Barcelona) – FXStreet Editor and Analyst, Omkar Godbole, sees potential for GBP/USD to test 1.5408/54 levels before heading higher towards 1.5460.
Key Quotes
“With no major UK data due for release today, the cable remains at the mercy of the overall market sentiment. The rout in the Shanghai Composite index continues as sentiment worsened further after 50% of the companies suspended from trading. Meanwhile, Greece has a five-day deadline to submit a detailed package of reforms to international creditors in return for a bailout or risk the “bankruptcy” of both the country and its financial system.”
“The risk aversion is likely to maintain its grip on the markets as we head towards the Fed minutes due for release in the American session. The September rate hike expectations in the US could drop if the Fed policy makers put more emphasis on the turmoil in the global markets, although it could result in a minor correction in the GBP/USD to 1.5520.”
“On the 4-hour chart, the spot breached the falling channel and extended losses to hit a low of 1.5413, before closing just above 1.5460 (61.8% Fib R of June rally). The pair could drop to 1.5408 (38.2% Fib R of Apr-June rally) in the early European session. However, the RSI on the hourly and 4-hour time frame has hit the oversold regions. Consequently, the pair may sustain above 1.5408-1.54, thereby opening doors for a re-test of 1.5460.”
“A break above 1.5460 would be a double bottom breakout, which could see the pair target 1.5520.”
“On the other hand, a a failure to sustain above 1.5408-1.54 would open doors for 1.5348 (76.4% Fib of June rally).”
(Market News Provided by FXstreet)