16 Jul 2013
GBP/USD look for 1.54 squeeze to shake out premature shorts - Pattern Traders
FXstreet.com (Barcelona) - The combo of softer U.S. data and inflation pressures building in the UK, suggests additional GBP/USD gains in the days ahead, notes Jonathan Eliasof, Founder at Pattern Traders.
While Eliasof is mindful of the risk event from Wednesday, when Bernanke testifies before the Congress, which may potentially balance his tone after the dovish shocker from last week, "technicals [nonetheless] point to further GBP/USD gains" Eliasof said.
Eliasof is looking "for rallies to stall ahead of 1.54, a level that coincides with the 38.2% fib, 61.8% fib of the pair's most recent decline, and April 11/12 highs", adding that "the 1.5275/1.53 area proves to be even more confluency as it aligns with a series of prior lows, the 50% fib and a cluster of moving averages."
Eliasof went on saying that "Friday's red close coupled with lower lows overnight is likely to have lured in fresh shorts, an indication of large stops above the market." While Eliasof looks to sell rallies into 1.54 if/when retested for a resumption of the underlying bear trend, he first sees the bullish scenario developing "looking for a squeeze to shake out premature shorts."
While Eliasof is mindful of the risk event from Wednesday, when Bernanke testifies before the Congress, which may potentially balance his tone after the dovish shocker from last week, "technicals [nonetheless] point to further GBP/USD gains" Eliasof said.
Eliasof is looking "for rallies to stall ahead of 1.54, a level that coincides with the 38.2% fib, 61.8% fib of the pair's most recent decline, and April 11/12 highs", adding that "the 1.5275/1.53 area proves to be even more confluency as it aligns with a series of prior lows, the 50% fib and a cluster of moving averages."
Eliasof went on saying that "Friday's red close coupled with lower lows overnight is likely to have lured in fresh shorts, an indication of large stops above the market." While Eliasof looks to sell rallies into 1.54 if/when retested for a resumption of the underlying bear trend, he first sees the bullish scenario developing "looking for a squeeze to shake out premature shorts."