Technical analysis of GBP/USD for August 5, 2016

After the rate cut by the BOE yesterday, GBP/USD has started a new downward trend that has broken out and below the long-term triangle pattern. Traders should be very patient and wait for a bounce before shorting this pair as the ultimate target remains 1.25.

Blue lines - triangle pattern

Red line - horizontal support 1.3050

GBP/USD has broken below 1.3170 support we mentioned yesterday and is trading just above 1.31. Next short-term support is at 1.3050 while resistance is at 1.32. Trend is bearish. However traders that have no open positions should wait for a bounce to back test the broken triangle boundary.

What I expect is a test or a move close to 1.3050 and then an upward reversal towards the 4 hour Kumo and the lower triangle boundary. Also the 61.8% Fibonacci retracement of the decline from the recent highs is also a possible target. The 38% level around 1.3170 is the most probable target. These targets are subject to change relative to the low the pair will have made. Overall I remain patient and wait for a bounce to sell it.The material has been provided by InstaForex Company - www.instaforex.com