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GBP/USD Strategy: Short Position Entered Above 1.53 Mark

GBP/USD Strategy: Short Position Entered Above 1.53 Mark

2015-10-30 07:41:00
Ilya Spivak, Sr. Currency Strategist
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Talking Points:

  • GBP/USD Technical Strategy: Short at 1.5322
  • Pound Down Trend May Be Resume After Prices Break Counter-Trend Line
  • Short Position Now in Play, Targeting Move Below 1.53 Figurevs. US Dollar

The British Pound may be readying to resume the down trend against the US Dollar after prices broke through counter-trend line support set from late September.

A daily close below the 38.2% Fibonacci expansion at 1.5237 opens the door for a challenge of the 50% level at 1.5153. Alternatively, a push back above the 23.6% Fib at 1.5341 – now acting as resistance – clears the way for a test of 1.5405, the intersection of the 14.6% expansion and a falling trend line capping gains since late August.

Risk/reward considerations argued against a trade in the immediate aftermath of the counter-trend line break, but a corrective bounce has now realigned positioning. We will enter short, initially targeting 1.5237. A stop-loss will be activated on a daily close above 1.5405. We will take profit on half of the position and trail the stop-loss to breakeven when the first objective is met.

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GBP/USD Strategy: Short Position Entered Above 1.53 Mark

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