- Sterling bulls are demoralised and are at their weakest since pre elections.
- The daily chart shows the pair suffered a bearish break from the falling channel; courtesy of dovish BOE in November, weak PMI manufacturing and construction.
- And now comes the services PMI.. the largest contributor to the economy.
The GBP appears oversold on the intraday charts, but we are yet to see a bullish RSI divergence. Most of the reversals are first shown by the RSI- via bullish divergence. Hence, I would refrain from adding long positions or even short positions.
If I see it near 1.4972 (channel resistance) ahead of the UK services PMI, I may think of taking a short trade with a very tight stop