GBPUSD Downtrend Resistance (Nov 10, 2014)

At the same time, stochastic is indicating overbought conditions, suggesting that sellers could take control of price action after the pullback is completed.

The pair could find resistance around the 1.5900 major psychological level, which lines up with the trend line and the 100 simple moving average. Take note that the 100 SMA is moving below the 200 SMA, confirming that the downtrend is intact. 

MACD is still heading higher though, which means that there may be a bit of buying momentum left before the selloff resumes. Stops could be placed past the 200 SMA, which might serve as the line in the sand for any corrections. An upside break past that area could be the start of a reversal.

There are no event risks for this setup today, although traders might be pricing in expectations for top-tier releases later on this week. Risk appetite seems weak with geopolitical tensions flaring once more, putting the odds in favor of another leg lower. 

By Kate Curtis from Trader's Way