GBP/USD trades in a 599 pip range from 1.3926 to 1.4525. Above 1.4525 then next point challenges the 5 year average at 1,4684. The topside to GBP contains many problems.
The first dilemma is GBP is driven short term by 1.3074 and 1.3325 and both are severely overbought. Longer term, GBP is embarking on a massive correction from 1.1900 lows and the overall price must remain below 1.5226 and 1.5276. Secondly, GBP trades at the top of its range and GBP can’t handle a higher price and this means not 1 pip above current prices. The longer term strategy is sell rallies. The most comfortable range for GBP is 1.4001 to 1.3896.
A large gray area exist from 1.4101 to 1.4203 and this represents an uncertain danger zone. GBP should actually trade to 1.4203 then 1.4280 but its not ready to travel higher. At 1.5226 and 1.5276 are slightly oversold while 1.3074 and 1.3325 are severely overbought and this creates the 1.4101 to 1.4203 undecided zone.
Sell rallies means below 1.3926 to many and massive supports at 1.3878, 1.3870, 1.3862 and 1.3765. Should GBP ever break through this zone then next comes 1.3654 and 1.3613 and on to 1.3325. Below 1.3977 and 1.3926, breaks at 1.3800’s will take time. The most important point is 1.3878 to travel lower.
GBP/AUD at current 1.8348 represents a trend just beginning as long as GBP/AUD remains below 1.8696. Any price rises can only travel to sell points at 1.8377, 1.8420 and 1.8476. The next break point below targets 1.8278 and 1.8252 then the 5 year average and caution at 1.8127 . Seen in GBP/AUD is confirmation to a lower GBP/USD and sell rally strategy. Further seen in GBP/AUD is miles of downside exists. If the 5 year average breaks at 1.8127 and a good shot exits then targets become 1.8040, 1.7953, 1.7944 and 1.7915.