GBP/USD Taking Long Term Retrace

GBP/USD is taking some retrace which can be termed as the retracement for the long term downward trend. The retracement will setup GBP/USD for a nice move towards 1.6160 level and once it manages to break below that level, the next target can extend well below 1.5900 level. The current retracement seem to extend as high as 1.6300 level and if the GBP/USD decided to extend the move above 1.6300 level, then the next level will be around 1.6425 level. We might also see GBP/USD stay in range between 1.6300 and 1.6160 levels for few days before breaking into any direction.

The market is above the short term moving average and is below the long term and medium term moving averages which indicated that the short term trend is upwards while the long term and medium term trend is still downwards. Also the medium term moving average is around 1.6300 level and thus this indicates the important of 1.6300 level.

RSI is just below 46 in daily charts and thus seems to suggest that it will support the movement in both directions and currently don’t seems to play any part in suggesting the direction of market. Overall it seems that the market might trade sideways for few days and this will create lot of entries for Intra-day and small term traders.

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