GBPUSD pushed sharply lower despite surging to 1.5500. GBPUSD pushed sharply lower despite surging to 1.5500 . What an eventful week GBPUSD had as price action extended its big rally in the first half of last week; just shy of the 1.5500 mark. At one point, the pair was trading up a staggering 490 pips from its week’s low, only to have sellers stepped in aggressively to push the pair down to 1.5140. With the deep retracement in play this week, traders are looking at further dips towards the immediate support at 1.5040 in observation of the U.K. election races on the 7th May, Thursday.
Posting it largest intra-day decline, GBPUSD is approaching the 80 days EMA (main support of the uptrend channel) on the daily chart. Breaking below its initial upward trend line, prices has now breach the 61.80% & 78.60% Fibonacci Retracement mark. On representation of the current bearish sentiment, most traders are made believe that negative signs are appearing for the British pound. However, the breaching of price at the immediate support at 1.5040 is needed to confirm that this itself is a further support for the above argument. Conversely, the ADX indicator is showing some sign of divergence in relation to the price action with the indicator being almost non-directional.
Currently sitting at 1.5140, traders are waiting to see if this last move was just a correction for the Sterling or a correction for further upside to the 1.5550 resistance. More broadly, a sudden drop to the oversold end of the Stochastic Oscillator indicators reflects that the bulls are losing steam. Technically, near-term support is at 1.5110, with a break below that exposing the British pound to 1.5040. To top that off, the looming uncertainty of the U.K. election is putting Sterling under immense pressure with traders calling for more short trade in the week ahead.