Monthly chart:

Current medium-term downtrend has broken longer-term uptrend, which is marked on the chart as a trendline that supported the pair in 2009, 2010 and 2013. After trading down to below 1.50 in January, the pair reversed all sub 1.55 losses in February and even broke above the big level. At that point it looked like a bottom is in place, but another push down followed as the pair declined all the way to 1.4566. It reversed from there but ran out of puff just above 1.58.

Weekly chart:

The strength of the reversal from 1.4566 low is even more apparent on the weekly chart. The pair travelled more than 1200 pips from the low to the high in just under five weeks, until 50 week SMA and 1.5750 level stopped it. Following the return of the US Dollar strength, the pair reversed back below the monthly trendline. The immediate support is seen near 20 week SMA (~1.5150) and then stronger at 1.50.

Daily chart:

Following favourable UK election outcome, the pair completed the three leg correction, trading to as high as 1.5815 and producing a weekly close above 200 day SMA. 350 pip pullback that followed would likely be just that, but slightly better than expected US CPI report was all that was needed to push the sentiment back to the bearish side. Weaker UK data releases, that came after that, didn't help it. 50 and 100 day SMA are now the next support.


Even though UK economy is in a good shape (at least in comparison to others), improving US data and expectations of the lift-off later in the year are driving the pair lower. The outlook mostly depends on whether the US can slip back into recovery tracks that have led the economy in 2014, while I expect UK economy to at least maintain its current state. On the 1st of July, 2015, at 12:00 GMT, the pair shall trade at 1.5525.
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