GBP/USD pair fell during the course of the session on Tuesday, slicing through the 1.54 level. We ultimately believe that this market will continue to go lower based upon the candle, and a break down below the bottom of the range should send this market looking for the 1.52 handle given enough time. Rallies at this point should be selling opportunities as long as we can stay below the 1.55 handle, as we have seen quite a bit of bearishness in this particular marketplace. The market recently had broken down below the uptrend line, which of course is a sign of a bit of a trend change. We turned back around and bounced enough to test that level again. We had a couple of sessions that ended up forming a shooting star again. With that, it shows that there are still plenty of selling pressures.
A break down below the 1.55 level shows that the downward momentum is still with us, and that it’s more than likely going to continue to go lower. After all, we closed at the very bottom of the range for the session on Tuesday, and as a result it shows that there is still plenty of downward pressure. If we can break down below the bottom of the range for the day on Tuesday, we feel that this market could very easily go down to the 1.52 level. That area should be supportive, but eventually we feel that we could even break down below there and if we do we should then go to the 1.50 level. That is one of the most significant “round numbers” that we can have in a market, and as a result we are more than willing to use that level to place a trade in this market. We believe that there will be massive amounts of support down there, and that it is the medium-term target that we are going to be aiming for, although we would anticipate seeing quite a bit of volatility as the US dollar continues to grab the focus.