The GBP/USD pair rose during the session on Friday, break above the 1.53 level but found the area far too resistive to overcome. This formed a shooting star, which of course was formed right after a hammer. This is a very bad sign for the British pound has the hammer should have triggered more buying. The fact that it couldn’t have any follow through suggests that we are simply going to consolidate in the general vicinity and then continue lower.
However, Moody’s downgraded the United Kingdom’s credit rating after hours on Friday, and as a result the markets have not reacted to it yet. Because of this, we believe that this market will continue lower and aim for the 1.50 level.
Written by FX Empire