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The GBP/USD pair fell during the session on Wednesday, as the FMOC minutes released gave no suggestion of further easing out of the United States. Because of this, we now have a situation in this pair that the Federal Reserve may or may not be easing soon, while the Bank of England most certainly will. Because of that, it's very possible that we will see a continuation of the bearish pressure.
The candle for the Wednesday session is a shooting star, and it is sitting right on support at the 1.55 level this is a very bearish turn of events, and has us thinking that the downside is probably more likely than the upside. In fact, if we can break below the 1.5450 level, we would be willing to start selling this pair again. The longer-term downtrend is certainly still intact as this bump over the last couple months hasn't exactly been stellar and does in fact look like it's weakening. With this being said, it would make sense that the Pound will lose value as it is so overly exposed to the European Union.
If the 1.5 450 Level Gives Way, we think the 1.5250 level is the next stop. It could be a little bit choppy on the way down there, mainly because of the massive support that was built from that area, but we think that it will eventually find that level. With this in mind, we do believe that the downside is the easier traded to and that it does jive well with the previous downtrend. As for buying, we don't really have that thought at this moment in time but there is a case to be made for it if we can manage to break above the top of the Wednesday shooting star. A break above that should see the pair go back to the 1.57 level, and a break above the 1.58 level would have us buying at that point as it would show a significant change in momentum. Until then, we just aren't interested in buying but are watching for sell signals.