GBP/USD analysis (July 13, 2011)

The Cable might be in the process to build a significant bounce on top of its recent low near 1,5775 correspondong to the 2011 low.
Indeed, the bounce coincides with the lower bollinger band and the studies look oversold.

GBP/USD: daily chart

We may also add that yesterday’s candle is forming a nice doji often representing of a possible trend reversal. In the event of a bounce, there is a potential objective towards 1,61.

It is worth noting that the recent break below the 200 moving average combined with the breakout of the long term trendline (in june) has confirmed a possible trend reversal on the pair. But we will need to see a break below 2011 low to validate a long term bearish outlook.