I posted earlier about looking to sell rallies on GBPUSD in line with dollar strength today, we have seen GBPUSD break through yesterdays lows to test the 1.6620, note also the recent rally was capped at the 61.8% fib for the move down from 1.6823 to 1.6583, this has also formed a double top and for me indicates further downside.
GBPUSD daily chart
With this in mind were to next for GBPUSD?
If you take the move from 1.6823 to 1.6583 (240 pips) and then extend this from 1.6726 we eye 1.6487 as support area, this is a crude (excuse the pun) form of technical analysis but the 61.8% fib for the move up from 1.6253 to 1.6823 comes in at 1.6470 which is just below. This area will then act as my next target on the downside on a break of 1.6583. Through there we then start to eye the 1.6370 which is the 100 day exponential moving average (for now) and then the 1.6253 which is the 05/02/2014 lows.
