FxWirePro: Bearish candles on GBP/USD; Buy GBP/USD binary puts for 15-20 pips

GBP/USD hit lows at 1.5603 during European morning trade, the pair subsequently managed to recover back at 1.5644 with insignificant volumes.

Doji and spinning top pattern candles occurred at 1.5743 and 1.5606 levels respectively to highlight the prevailing downtrend both on intraday and EOD charts.

A sharp sell call is traced out by slow stochastic (14,3,1) as %D line crossover exactly above 80 levels on weekly charts, this bearish view is also supported with 14 day RSI.

The pound edged higher against the U.S. dollar on Friday but the volumes are not confirming this rises, U.K. service sector has expanded at a faster rate than expected this month, although gains were capped by ongoing concerns over the Greek debt crisis.

Trading volumes were expected to remain thin with U.S. markets closed for a national holiday.

We recommend either buying binary puts for a target of 15-20 pips or short July month futures on short term basis for a target of 1.5575.