GBP/USD – Head and Shoulder and Fibo expansion play

27 Jun 2016

Resistance – 1.35, 1.3654, 1.3835-1.3867

Support – 1.3304, 1.3226, 1.30

Monthly chart pattern – Head and Shoulder

Neckline level – 1.3226

• Heightened uncertainty post Brexit is keeping the pair on a weaker footing. Cable is flirting with 1.34 handle in early Europe.
  

• Prospects remain for a intraday rebound to 1.35 unless head and shoulder neckline level of 1.3226 is breached, in which case the risk would shift in favor of a drop to 1.40.
  

• A rebound from 1.3226 (as seen on Friday) followed by a day end closing above 1.35 would signal a short-term bottom has been made on Friday and a technical correction could yield 1.3835 (previous cyclical low) – 1.3867 (78.63% of Fibo exp).