What’s next in GBP/USD?

The pair has dropped from the high of 1.2706 to 1.2550. BOE event didn’t offer anything that markets weren’t prepared for. The sell-off, in part, could be due to sell the fact trade.

Carney warned the rates could either way…there is nothing new in this either.

Bears must be salivating at the idea of Pound falling back to 1.21-1.20 levels. On the daily chart below, we can see a double top formation of sorts with the neckline support at 1.2412 levels.

However, the daily RSI is still above 50.00, furthermore, on the 4-hour chart we also see the rising trend line is intact.

4-hour chart

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Hence, the best level to initiate shorts is below the rising trend line support. On the other hand, I could easily see myself initiating fresh longs if the spot rebounds from the rising trend line and moves back above 1.2605 levels.

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