GBP/USD: The bears are back in town
With the US Dollar outperforming on Friday as markets responded to better than expected US employment report, the GBP/USD reversed at the 1.5584 resistance area, the 50% Fibonacci retracement from December’s high to March’s lows. This is a key area, if we also consider that with the latest price movement a double bottom formation has been completed. At 1.5439, the cable has started the day on a negative footing and we expect to see further downside with key target the 38.2% Fibonacci level at 1.5399. A break below that level would open the door for the 1.53 area. In the alternative scenario, we would have to see a consistent break above the 1.5584 level, for the bias to change on the upside. The lacklustre economic calendar in European hours and the empty on in the US session put the focus of the day on the comments by St. Louis Fed’s Bullard, with traders looking for cues in regard to QE3.
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