Morning guys,
US shows awful statistics yesterday. Fundamental factors are so strong that they overcome any common sense of technical tools that we use and torture them. This is not result of GBP or EUR strength, but weakness of USD first of all.
Thus, situation on GBP and EUR now is very similar - as former as latter are coming to next 5/8 weekly Fib resistance level. Both are overbought (EUR is stronger), both have an Agreement at these levels:
On daily chart of GBP price ignores 1.27 extension of butterfly and comes to 1.618 level. At the same time, our major OP is also stands very close and GBP could make an effort to reach it as well. Thus, our journey to OP that was seemed as long - term is appearing to be short-term instead.
ON 4H chart GBP is coming to butterfly's inner AB-CD pattern with XOP at the same level as 1.618 butterfly extension.
Following to common sense and probabilities, market has to show reaction on strong resistance, especially with O.Bought on the back. Sometimes happens that fundamentals are very strong and you're waiting and waiting for pullback, but it doesn't come. Well, maybe now we have the same case. But you have to make your personal choice. I feel uncomfortable to buy at this situation and prefer to wait.
Thus, we expect some downside reaction on the market to 1.32-1.3270 level...