GBP/USD Short-Term Update

By ForexMansion.com

GBPUSD: 1.5441

Short-Term Trend: downtrend

Outlook: Last week I said that we were in a bear market and if the pair rallied to 1.5950, this would be a good opportunity to take a short position. The market however was so week that couldn't reach the 1.5950 level. Instead, it continued its decline and reached 1.5327 before recovering a bit. The next Fibo levels to watch are 1.5260 and 1.5000, so I expect further weakness going forward. but right now the market is severely oversold. In a downtrend that may mean nothing but still one should be more careful if they are not already short – shorting right now may be too late.

Strategy: The short side is favored but the risk/reward ratio is not compelling right now.