GBP/USD posts a sharp decline

In the end the bullish correction from 1.6550 did not manage to extend up to the May low. The currency pair turned around a little earlier, soon after reaching the weekly R1, and plunged 150 pips before stopping at the monthly S1 level. If the sell-off persists, which is a likely course of events, the next significant support will be at 1.63, represented by the monthly S2. Once there, the Cable will have to move only 50 pips South to re-test the 2014 low at 1.6250.

After the yesterday's dip there are more people believing the Sterling is now below its justified value. The percentage of longs increased from 56 to 66%. At the same time, the relative amount of buy orders also went up, namely from 53 to 69%.