The main theme in the Forex space remains the broad based dollar strength and the GBPUSD continued to head lower despite a lower level of trading activity. A bounce seems more likely in the current trading environment as the dollar rally has gone too far in a very short period of time. The stochastic indicator is already for quite some time in oversold conditions and last week low 1.2228 can provide us with a good support level from where GBPUSD can bounce, however, a break and a close below last week low will expose 1.2150.
The first major level of resistance comes in at 1.2360 followed by the last week’s opening price 1.2476 which is very close to the big psychological 1.2500 level. The UK economic calendar is empty but traders need to be aware of the fact that the current low level of trading activity might be the catalyst for some erratic behavior.
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