GBPUSD Algo Crash and Critical Support
US indices and algorithms among the parities triggered each other and led to hard sales, and caused an increasing volatility in global markets yesterday evening.
The GBPUSD active long positions, which were not affected by either Brexit nor the FED, may have been closed by the action taking place last night. At least the price movement is pointing out to this.
The Algo Crash, which had previously seen a similar pattern on GBP crosses on 01.07.2016, caused the big position to close.
The pound then climbed up to 1.40 + levels without closing below the bottom level.
The most important event of the week for Cable is undoubtedly the interest rate decision at 15:00 CET on Thursday (Current 0.5% Market Expectation 0.5%
The market is not expecting any change here.
On the weekly chart, cable moved below the EMA 200. RSI is in the overbought region.
The pound may need to take a rest for a while.
On the daily chart, 1.40900 resistance is important. 1.39800 is the main support.
If the price closes below 1.39800, we may see a bearish movement towards 1.36900 and 1.36500.
I will stay out of the Bull game for a while and watch the support and resistance.
To enter a LONG position, I will wait for H4 closings above 1.40900 or pullbacks towards 1.36900.
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