ICmarkets
Short

We feel the GBP is overbought and ready for a sell off...

FX:GBPUSD   British Pound/U.S. Dollar
152 0 3
Going into the early hours of yesterday’s US session, cable saw an increase in value on the back of lower than expected US manufacturing data. As you can see, price ended the day whipsawing through a H4 resistance area at 1.3290-1.3242, which tagged not only the 1.33 handle, but also the completion point of a H4 AB=CD bearish pattern around the 1.3316ish range.

What this bullish move also did was bring prices down to a H4 demand seen on the US dollar index             at 95.52-95.61, and also force sterling back up to the underside of a daily supply zone coming in at 1.3371-1.3279. This – coupled with the above H4 structures and the fact that weekly price is touching gloves with the top edge of a minor range seen at 1.3241, we feel a downside move is likely on the cards today. Nevertheless, traders will want to exercise caution due to today being the first Friday of a new month: NFP day!

Our suggestions: From a technical standpoint, this pair is overbought and potentially ready for a sell off. With that in mind, should one manage to pin down a lower timeframe setup to sell within the current H4 resistance area, the unit will likely reach at least the 1.32 base.
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