GBP USD in Position to Form Reversal Top

The GBP USD continued its upward trend this morning with a test of the1.70 area. Sellers quickly surfaced which may be a sign that the buyingis slowing down at current levels.

Intraday Analysis

British Pound

The GBP USD continued its upward trend this morning with a test of the 1.70 area. Sellers quickly surfaced which may be a sign that the buying is slowing down at current levels. Although the main trend is up, gains may be limited because of the August 6th Bank of England meeting. Traders are expecting the BoE to leave rates unchanged but to end its asset buyback program.

Intraday analysis indicates that this market may be topping out which could trigger a 2 -3 day break or at least a 50% correction of the current short-term rally.

Technical traders should be watching the U.S. equity futures for clues as to whether this currency pair will weaken into the close.  In addition, traders should be looking for the possibility of a closing price reversal top.  A close under 1.6926 will form this top which will need a followthrough break tomorrow to confirm it.