GBP/USD – 1.5698

Most recent candlesticks pattern : Hammer
Trend                                    : Near term up

Tenkan-Sen level                       :1.5703
Kijun-Sen level                        :1.5698
Ichimoku cloud top                     :1.5660
Ichimoku cloud bottom                 :1.5626

Original strategy :

Sell at 1.5785, Target: 1.5670, Stop: 1.5820

Position: -
Target:  -
Stop:-

New strategy  : 

Sell at 1.5785, Target: 1.5670, Stop: 1.5820

Position: -
Target:  -
Stop:-

Although cable’s rebound after intra-day retreat to 1.5661 suggests near term upside risk remains for recent rise from 1.5234 to bring retest of 1.5735 and possibly towards 1.5760-65 (38.2% Fibonacci retracement of 1.6618-1.5234 and 50% projection of 1.5531-1.5735 measuring from 1.5661), however, loss of near term upward momentum should prevent sharp move beyond there and reckon 1.5789 (61.8% projection) would limit upside and bring a retreat later. Below the upper Kumo (now at 1.5660 and this would also penetrate said support at 1.5661) would suggest top is possibly formed and bring test of 1.5626-29 (current level of the Ichimoku cloud bottom and previous resistance) but break there is needed to confirm.

In view of this, we are inclined to turn short on next rise but one must exit on such retreat. Above 1.5800-10 would risk marginal rise but still reckon price would falter below 1.5850 and risk remains for a strong correction to take place later.