The pound/dollar has been trading between the U1 and D1 for three days. Yesterday didn’t quite work out like I had expected. After UK inflation data came out, the GBP/USD returned to 1.5216 and then lifted to 1.5238 on weak US industrial data.
The day closed at the LB. When the price is sat at the balance line, it means the market is balanced and the pair is readying itself to deviate from equilibrium. Taking into account that today’s calendar is empty and the Fed minutes are out this evening, I’m still thinking we’ll see the pound fall. The target is around 1.5090.
The stochastic has flipped upside down which is a signal to sell the pound. Wednesday’s target is 1.5090. Although I don’t see any hurdles to overcome for a fall to 1.5045 (D3 on the hourly).
The closest target is still 1.4900.