GBP/USD taking retrace to setup dip

GBP/USD is taking retrace at the moment and seems to be setting itself up for a nice move below 1.6000 level. The current retracement seems to be primarily targeting 1.6160 level and is expected to take a dip from that level. If GBP/USD manages to break above 1.6160 level, then the next level, around which traders will look to sell GBP/USD is 1.6260 level. The traders will look to initially target 1.5940 level and once the market breaks below that level, the next target will be something below the 1.5800 level.

If we look into the moving averages, we can see that they are somewhat giving the same picture. The medium term moving average is below the long term moving average and is pointing downwards. The 1.6160 and 1.6260 level are around the medium term and long term moving averages. GBP/USD is currently above the short term moving average which is indicating upward trend so it sums up all things that GBP/USD is taking retrace towards medium term moving average and will take a dip in long term trend. RSI is gradually opening up and has moved above 44 and seems to suggest that it has more than enough space to make a move towards 1.5800 level.

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