GBP/USD falls to a low of 1.3514 on the day
The pair has broken out of the recent range that I pointed out in my earlier post here. It looks like dollar strength and the chaos in UK PM May's cabinet reshuffle are weighing in on the sterling a bit more than other major currencies today.
The next line of support will be at the 38.2 retracement level on the hourly chart at 1.3506. That was the level that held firm on 3 and 4 January trading which allowed buyers a run up towards the 1.3582 level in recent sessions.
Should that fail to hold, a fall towards 1.3450 would be the next level to look out for.
The pair is now back up to 1.3527 - as the 200-hour MA and the 1.3524 support looks like it's having enough of an attraction to get buyers interested again. Let's see if it stays range-bound or a break to the downside here will spell further weakness.
Personally, I like the risk-reward associated with the ping pong trade I mentioned earlier. Even if the pair falls further, the downside is limited but the upside potential of the trade is great.
