FxWirePro
Short

Cable likely to break support 1.4070 after Gravestone formation

FX:GBPUSD   British Pound / U.S. Dollar
220 0 4
Bears in GBPUSD             don’t seem to be complacent as this is evident if you observe that the sterling against dollar has been collapsed almost about 11.67% in last 10 months, observing at the current GBP environment we could foresee more room for hedging its depreciation.

From last 1 week, GBPUSD             shows loss of 2.69%, a drop from highs of 1.4459 to the current 1.4070 levels.

Day highs (1.4152) were not able to sustain and inching towards support zones at 1.4070 levels.

During the intraday sessions with bearish sentiments mounting the pair has been able to break below these supports at 1.4070.

Gravestone evidenced their bearish effects; now break below support most likely.

RSI: Currently, RSI (14) trending below 42 levels converging to the price dips as there is huge selling momentum, lower lows are evidenced, on closing basis movement should be closely watched if it suggests downward signals.

Stochastic: As slow stochastic noises with %D line cross over even below oversold levels (current %D line flashes at 83.5125), it is an alarm that bears trying to take over the ongoing declining trend.

What could we interpret price line when stochastic oscillator remains in & around oversold zone since August 2015.

The current prices way below 7 & 21 moving average curves, as another lagging indicator ( MACD ) is also showing bearish crossover, hence, downtrend seems to be robust.

Trade tips: As a result of above technical reasoning we see the pair likely to head towards 1.40 and below levels and 1.38 by Q2 end, so advisable to stay short in mid-month futures for these targets.
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