FxWirePro: GBP/USD forms Bearish engulfing pattern, good to sell on rallies

Candle stick pattern – Bearish engulfing pattern (Daily Chart)

• Cable hits high of 1.36125 yesterday and declined almost 100 pips on weaker than expected UK PMI data. UK Services PMI released came at slightly better than expected. The pair jumped only 10 pips after the data. The pair hits high of 1.35497 and is currently trading around 1.35490.
   
• Overall UK DEC PMI showed that UK is growing at steady pace. But slight decrease in new orders and hiring might drag the growth slightly lower. The ‘all-sector HIS Markit/CIPS PMI output index was steady at 54.7 which indicate strong year for the UK economy.
   
• On the lower side, near term support is around 1.3475 (7- day MA) and any break below will drag the pair to next level till 1.3440 (10- day MA)/1.34020 (61.8% retracement). Short term bullish invalidation only below 1.30280.
   
• The near term resistance is around 1.3600 and any break above will take the pair to next level till 1.3655/1.3700. Bullish continuation only above 1.3650.

It is good to sell on rallies around 1.3575-80 with SL around 1.3630 for the TP of 1.3500/1.3460.

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