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Ian Coleman believes bearish signals in GBP/USD will lead to further losses despite three days of net gains.
Ian Coleman: Last week we saw a mild correction higher. We saw 3 weeks of net gains before the rally stalled at 1.5260. The week closed below 1.5245 and that was a Marabuzo level from 2nd November. The 6 hour chart posted a bearish outside bar. The 4 and 2 hour charts posted Doji candles. This combination of bearish signals led us to believe there are further losses in GBP/USD pair. If we break it down into shorter term timeframe we have been in a consolidating channel formation. It looks like we are breaking that overnight to the downside. Using correlation the EUR/GBP is close to 261.8% extension level at 0.7000. So we are looking for further losses to deepen. We have the Inflation report at 09:99 GMT. We have the Fibonacci level at 1.5166. We are looking to sell into rallies this morning. So the call today is to sell GBP/USD at 1.5195 and the stop is placed at 1.5225 and the targets are 1.5140 and 1.5060.