GBPUSD sitting at 2/3rds retracement of YTD Range

The GBPUSD today printed 1.5780 lows, getting very close to the 1.5750’s lows from January 2011, otherwise it has undercut the low printed in every other month so far in 2011.

·         What lies beneath? It looks like the 1.5690’s zone is a 78.6% retracement of the YTD range and also appears as a late-2010 resistance zone.

·         What lies above? Getting back up to the gap fill level at 1.6050s, from the NFP Friday in July.

When to look for a bounce? It looks as though today is headed for printing a pin bar and an up-day (i.e. blue candle in chart below, closing price > opening price), which could set the stage for a bounce back up. So far in 2011, the sell offs in GBPUSD with consecutive seller days (red bars in chart below) have often been halted and reversed after the daily chart has printed a buyer bar.

Image001

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