GBP/USD breaks up-trend at 1.66

Being that GBP/USD has finally left the boundaries implied by the rising wedge pattern, which was originated in the first half of 2013, there is a strong case for a strong sell-off. The key support, namely the up-trend at 1.66, has been breached, leaving the 2011 highs and the 100-day SMA at 1.65 exposed. If the Sterling does not stop there, which is a likely scenario given the recent events, the price will be expected to test the 2012 highs at 1.63.

While in EUR/USD traders started closing short positions, here U.S. Dollar's appreciation encouraged weak but nonetheless selling of the British Pound. The portion of open short positions grew by one percentage point to 56%.