GBPUSD Watch 1.3840

The British pound appears increasingly weak against the greenback as the upside breakout in the US dollar index gather steam. A bearish head and shoulders pattern with a four-hundred point downside projection in action while the GBPUSD pair trades below the 1.3840. A short squeezes back towards the 1.3900 level this week may be used as a major selling opportunity, in expectation of further downside.

• The GBPUSD pair is only bullish while trading above the 1.3840 level, key resistance is found at the 1.3880 and the 1.3910 levels.

• If the GBPUSD pair trades below 1.3840, sellers may test the 1.3710 and 1.3660 support levels.