GBP/USD Corrects Amid Extreme Overbought Conditions

While moving upwards, the pound/dollar pair added more than 2.5% in just 8 trading sessions. As a result, the price approached the psychological level of 1.4000.The pair’s strong bullish momentum coupled with an important resistance level led to a decrease in the volume of long positions. Thus, the British currency entered a correction.

Comprehensive indicator analysis has repeatedly signaled that the pound sterling is overbought. This once again confirms that the pair’s corrective movement in the market is logical.

Outlook

The pair’s correction from the resistance level of 1.4000 is still underway. Moreover, the British pound is still in overbought territory. To extend losses, the price needs to fix below 1.3870. In this case, the way to the level of 1.3800 will open.

InstaForex Group

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