Is The British Pound Due For A Correction?

• 25 Jan 2018

GBP/USD

GBP/USD has enjoyed an extended bullish run over a weaker U.S. Dollar. However, there are signs that the pair is reaching strongly overbought conditions. The pair has broken the upper Bollinger band in the last two trading sessions indicating a trend reversal is possible in the near-term. At the same time, RSI has reached strongly overbought territory.

GBP/CAD

The GBP/CAD pair has broken the 1.743 price line to the upside, which represented a strong resistance line. However, the bullish move to break the 1.743 price level has resulted in a break of the upper Bollinger band and a break of the 70 resistance line on RSI. A doji candle to start today’s trading may signal the end of the bullish move.

GBP/AUD

The GBP/AUD pair has broken the 20-period EMA and the 1.735 price level. The current bearish candles indicates that the Pound may be losing its dominance. RSI has hit the 70 resistance line and appears to be taking a downward trajectory. The pair may continue this trajectory back towards the 1.735 price line.

GBP/NZD

The GBP/NZD pair is testing the 1.938 price line after strong bullish move in yesterday’s trading. The pair has been trading within the 1.881- 1.938 price range and yesterday’s session pushed the pair out of this range. The question is: will the bullish momentum continue? RSI and MACD are providing mixed signals which indicates that buyers may be losing steam and lack the conviction to drive price action higher. The pair will likely return to its previous trading range.