British Pound Reverses Near 2.0500 Resistance

Commentary: We wrote yesterday that “the rally from 2.0180 is testing resistance from the 61.8% of 2.0678-2.0180 at 2.0488 and the 11/23 low at 2.0518. Look for a top and reversal now.” Cable’s high yesterday was 2.0518 and the pair fell to 2.0328 before finding support and rallying back towards 2.0450. With the rally from 2.0180-2.0518 in just 3 waves, we expect a drop below 2.0180 and maybe a test of the 100% extension of 2.1160-2.0353/2.0831 at 2.0024 before the pair finds real support.

Strategy: Bearish, move risk to 2.0518 (from 2.0678), target below 2.0030