This breakout rally from 1.55 has seemingly moved in a straight line up. There were very little corrections during this breakout. However, the correction that has started in the $GBPUSD last week has gathered steam today as cable falls below the major psychological level at 1.60.
The USD is gathering strength as US interest rates rise (most likely in anticipation of an eventual taper). However, the bullish bias in $GBPUSD doesn’t completely unravel until 1.57, the 61.8% Fibonacci level of this entire breakout rally. Before that level is the major 1.5750 level that capped rallies all year long before this recent breakout. With a light calendar week, it is very likely that $GBPUSD corrects back to the next major level at 1.5750. From there, it is decision time for bulls and bears.
Reversal in the Making (FMFX)
GBPUSD Update (50’s Blog)