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GBP/USD bulls tiring in overbought territory - FXStreet

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 8, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet noted GBP/USD conditions overnight and suggested the pair had run into overbought territory.

    We are currently seeing some tired bulls out there in Asia as well as price falls back on the 1.53 handle.

    Key Quotes:

    "The British Pound broke higher against the greenback, extending its intraday rally up to 1.5338 a fresh 2 week high, before pulling back some before Wall Street's closing bell. The GBP got a boost from local data, as in the UK, total production output was estimated to have risen by 1.9% in August compared to the same month in 2014, whilst monthly basis, it rose 0.5% against 0.3% expected. Year-on-year, manufacturing production fell 0.8%, but rose 1.0% in the month. The pair has settled around 1.5315 afterwards, which represents the 38.2% retracement of the latest daily decline a major resistance level."

    "Technically, the 1 hour chart shows that the 20 SMA has advanced alongside with the price, and stands now around 1.5280, whilst the Momentum indicator hovers around overbought levels, and the RSI turned slightly lower around 65, suggesting a short term downward corrective move.

    In the 4 hours chart, the Momentum indicator has finally picked up and maintains its bullish slope, whilst the RSI indicator consolidates in overbought territory. In this last time frame, the 200 EMA converges with the daily high, which means a break above it is required to confirm a continued advance, eyeing then an advance beyond the 1.5400 level."
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