Sasha Singh
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GBPUSD In Oversold Zone, Should We Expect Some Gains Now?

GBPUSD : Hourly Chart

GBPUSD trying to breakout from the descending triangle trend however seems like 50 day SMA is providing resistance to the pair. The pair broke out from the resistance at 1.6206 after the ADP employment change report despite the data met the economist’s expectation. However the gains still seems limited as it again came under the consolidation range. Overall the trend is signaling that the pair will continue to decline and will break down below the support at 1.6162.

GBPUSD : Daily Chart

On the daily chart we can see the possible support levels pair may find. Currently it is testing the support at 1.6206. Gains are possible as on the stochastic oscillator the pair is in the oversold zone but are capped as there is a falling resistance trend line which will prevent the pair in rising further.

Another data which might change the direction of pair is ISM Manufacturing PMI releasing at 10:00 AM EDT. After yesterday's missed US data, investors seems to be cautious now and further weak Manufacturing data might push GBPUSD higher but the point to be noted is that the gains are capped.