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GBPUSD Pullback to Offer Favorable Long Entries- 1.57 Key Support

GBPUSD Pullback to Offer Favorable Long Entries- 1.57 Key Support

Michael Boutros, Strategist

Talking Points

GBPUSD Daily

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPUSD weekly opening range taking shape below key resistance 1.5878-1.5940
  • Trade remains constructive while within median-line structure off the monthly low
  • Interim support 1.5774 & 1.5699 / MLP- (bullish invalidation)
  • Resistance breach targets 1.6050, 1.61 & 1.6187
  • Momentum remains constructive- divergence warns of possible near-term weakness
  • Note pending RSI support trigger- break to mark more significance correction
  • Event Risk Ahead: US Durable Good Orders tomorrow & 1Q GDP & Core PCE on Wednesday

GBPUSD 30min

Notes: Sterling is testing near-term support at the median-line extending off the monthly lows after failing to breach above key resistance into 1.5940 last week. A break below this level shifts the attention to support targets at 1.5774 & 1.5750 with our bullish invalidation level eyed at the 1.57-handle / MLP support. Note that intra-day RSI has broken to its lowest levels in more than two weeks, suggesting that near-term momentum is waning.

Bottom line: the rally remains at risk near-term below 1.5878 with a break below the ML shifting the immediate focus lower. That said, we’d be looking for long triggers lower down with the broader topside bias in play while within this formation. Caution is warranted heading into US event risk this week with the May Durable Goods report & the final read on 1Q GDP on tap mid-week. A quarter of the daily average true range (ATR) yields profit targets of 31-34pips per scalp.

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Relevant Data Releases

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex,contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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