GBP/USD Forecast – 23.6% Fibo stands exposed

11 Tem 2016

• As expected in the morning update, pair suffered losses after having failed to sustain above 5-DMA. However, the losses were cut short at 1.2850 after news Andrea Leadsom quit Tory leadership race. Theresa May now looks set to be crowned Prime Minister.
  

• Pair’s sharp reversal from 1.2850 has kept the bullish price-RSI divergence on the 4-hr chart intact and thus odds of a bullish break from falling channel have increased.
  

• Such a move would open doors for a corrective rally to 1.3315 (23.6% of 1.5019-1.2789).
  

• On the other hand, another failure at 1.30 if followed by a break below today’s low of 1.2850 would signal a possible break below 1.2789 and further drop to 1.26 handle.