The GBPUSD tested good support at the 1.5085 level off the weekly chart earlier today (see post from earlier today) and found the dip buyers near the area, but the correction could only get up to 1.5097 before turning back down again.
GBPUSD keeps the bears in control.
We needed to see a correction back above the 1.5100-04 area to scare some of the shorts and attract buyer, but that was not to be. So as per the prior post:
The level (i.e. 1.5085) is tempting but the “market” might want to get more ounces of flesh from the fear of the buyers.
GBPUSD weekly chart
The next pound of flesh was taken and the price has extended the declines to 1.50537.
Now what?
The pair is really in no- where’s land. The next real support probably does not come until 1.5000 natural level of support.
With the price below the trend line on the weekly chart at the 1.5085 level, it really is just a guess that a bottom is in place. Sure you can think:
- The market is oversold (nothing new here)
- < 1.5000 level is my stop (OK, you are probably not alone)
- The last ounce of flesh is being washed out with stops triggered below the trend line on the weekly. So time to buy.
- The price will rebound above the 1.5085 level and then 1.5100-04. i.e. there will not be sellers against those levels.
What is being ignored is:
- Markets can get even more oversold in a trending market
- The trend is down
- Do you want to risk 60-70 pips down to 1.5000
- The trend line was broken on the weekly and the hourly as well (see chart below) and perhaps it is not the last ounce of flesh
- The buyers are not winning any battles
In other words, give me more of a reason to say the bottom is set before I call the bottom.
GBPUSD shows more bearish still
