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Kumo and 50% Fib Critical for GBPUSD’s Advance
I’ve been watching the GBPUSD lately and have been tempted (actually did take a long) off the price action triggers off the lows but they have simply underperformed as the pair has been stuck within a 150pip range for the last 4-5 days chopping around with no major signal as to who’s in charge – only hints (that the bulls are trying to wrestle control). However, the Kumo paints a completely different tale as the thickness and trajectory suggest the pair will have trouble with all upside advances. Besides the fact the Kumo is so thick and daunting while sloping downward, check out the 50% fib which we drew below from the 1.6250 – 1.5930 leg downward. The 50% fib lines up perfectly not only with the flat top which comes starting July, but also the swing low from June 16th which caused a 175pip corrective bounce in the pair – only to start another downswing. Thus, we suspect this level will have a high magnetic value if the rise continues to be corrective. Bears looking for an ambush point will likely use this so if the pair has trouble eating through the Kumo and cannot really break it come early July, look for this to be a rejection point for it to exit out of the Kumo below and re-attack the lows. A break above this level while using it as support gives it extra value and energy for upside advanes toward 1.6136 and a return to 1.6250 if it can clear the aforementioned hurdle.
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