GBP/USD Plunges; Sell Retracement

The GBP/USD plunged sharply lower following the news that Standard & Poor’s gave the economy a negative outlook. The AAA rating is basically being threatened.  S&P also said that the U.K. debt burden may reach 100% of GDP. 

The GBP/USD plunged sharply lower following the news that Standard & Poor’s gave the economy a negative outlook. The AAA rating is basically being threatened.  S&P said that the U.K. debt may reach 100% of GDP. 

The hourly range is 1.54248 to 1.58154.  This creates a retracement zone at 1.56201 to 1.55740.  So far the market is holding this range. Breaking this range would signal the selling is greater than the buying. Look for a technical bounce to the upside to begin in this zone then be prepared to sell the rally.

If 1.55978 holds as a minor intraday bottom then look for a retracement back to 1.57066.  Stopping the rally at this point will create a secondary lower top and could attract heavy selling.