GBP/USD Eyeing Short-Term Rebound

GBP/USD

Monthly

  • Last monthly chart continue to paint a bearish sentiment
  • Seasonality favour a dump and pump scenario (thus hunting for a potential reversal zone)
  • Price action may break below 2015 low and targets 1.4366 and 1.4225
  • Expect a new low with a short term bounce

Weekly

  • Potential AB=CD formation but we do not see this price action to play out
  • Watch weekly RSI for clues which may confluence with key Fib support level for a short term bounce
  • Sentiment remain bearish thus we cannot rule out a new 2016 low before we see a short term bounce

Daily

  • As long as price action remain within the dome, GBP/USD remain to head lower
  • Daily RSI has rooms to head lower and yet to make any bullish divergence
  • Recent USD strength may cause a push to trigger stops below before a relief rally

Conclusion

Technically looking for a low or a new low which can be a platform for a short term relief rally as we kick off 2016. Upside remain limited unless the BOE decided to act on interest rate as early as Q2 of 2016. Given the recent economic events, this may not be the best option thus weakness in sterling may persist after a short stint of relief rally.

May well repeat the following on the daily chart

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