Pound on its way towards testing the shorts
Even though the pound has had some large moves of late, the best judge of a trend is how it performs against some of the longer-term tech.
One such level is not too far away.
GBPUSD monthly chart
The 38.2 fib of the 2015 drop is sitting at 1.4635. The 2015 move was the second leg of the move from the 1.70's in 2014. Another interesting level to note (not drawn but I've checked it) is that the 38.2 of the 2014/16 fib sits near enough bang on the 61.8 of the fib above. That's at 1.51 odd so a way to go yet.
In the meantime we have the Feb high some 30 pips above the 38.2 fib at 1.4669. Another strong looking area is around 1.4800. There's been support and resistance roughly 20 pips above and below 1.48 so that's where the battle lines for that big figure are drawn.
Right now, we're seeing resistance around the early Mar highs and support on this rally will be building around 1.4550, 1.4520/25, 1.4500/10 and stronger around 1.4470/80
A lot has been made about the Obama Brexit comments but many people I've spoken too think he should keep his nose out of it and shove his trade threats where the sun doesn't shine. That hasn't stopped the market reducing Brexit trades and thus that's led to the unwinding of pound negative trades.
There's a long way to go yet and many moves to come but it's the test of the big levels that could determine whether the longer term trend continues of starts turning, and that's the sort of info we need to decide our bias.
