The GBP USD produced two consecutive days of higher tops and higher bottoms and formed a new Main Bottom at 1.5801. This action caused the trend line indicator to move up from 1.4397. A move through 1.5801 will turn the Main Trend to down.
On Monday the GBP USD confirmed last week’s closing price reversal top. The first leg down was 1.6663 to 1.5801. Currently this pair is retracing this range. The first upside objective at 1.6232 to 1.6334 has been reached. There was not much of a technical bounce to the downside following a test of this level which means the buying is still strong.
A close over the .618 number at 1.6334 indicates that there is room to rally to the multi-month high at 1.6663. A close under the 50% level at 1.6232 will indicate weakness and could trigger a test of the swing bottom at 1.5801.
If this pair gets weak and the trend turns to down then look for an acceleration to the downside with a test of 1.5530 likely.
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