Intraday players continue to sell into rallies with the 50 Fibonacci level at 1.5928 attracting solid selling interest from the bears.
The next major support level to keep a close eye on the downside will be the 1:1 (Blue) that comes in at 1.5675, if this level is tested in the coming days I would expect to see some buying interest from the bulls. If the 1:1 (Blue) fails to attract any solid buying interest the current bull run will come into question as this is an indication that the current trend could be coming to an end. There are also a number of Fibonacci levels on the downside including the 38.2, 50 and 61.8 that could offer support for this market if the 1:1 (Blue) was to fail.
GBPUSD H1
I mentioned in yesterdays analysis on cable that there was a strong chance that the stops sitting below the 1:1 (Purple) and 23.6 Fibonacci level that coincided at 1.5830 were likely to be tested, but for the momentum to pick up on the downside the market would need to take out the 1:1 (Light blue) at 1.5790. Well in thin Asian trade intraday players took out further stops below the 1:1 (Light blue) with the market falling 50 pips in a hurry, so far the market has been unable to go on with the move in early European trade ahead of the data out of the US later today.
GBPUSD M30
Moving down to the 15 minute chart we can see that there were plenty of interested sellers after the break of the 1:1 (Purple) with the 1:1 (White) and 38.2 Fibonacci level at 1.5838 attracting the attention of the intraday players.
The level to watch now will be the 1:1 (Pink) and 50 Fibonacci level that coincide at 1.5835/40, if this resistance level is tested and can attract the selling interest of the bears a push for the 1:1 (Blue) outlined in the H1 chart will be on the cards. However any break above the 1:1 (Pink) could see a push for the 1.5930 high.
In the end it will all likely come down to the data out of the US later today.
GBPUSD M15
* A 1:1 refers to a current correction being equal in length to a prior correction
