Forex Strategy: GBP/USD Climbs Further Following Hammer Signal
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- GBP/USD Technical Strategy: Longs continue to be preferred following Hammer formation
- Lack of meaningful bearish reversal signal leaves bias to the upside
- Rally may encounter selling pressure at 61.8% Fib Retracement Level
The Hammer candlestick on the GBP/USD daily chart as noted in yesterday’s report continues to hint at further gains for the pair. We saw several days where sellers were unable to hold prices down around the 1.6250 mark, resulting in several long wicked candles, and suggesting buyers were taking over price action.
With the pound pushing above the 50% Fib Retracement level at 1.6460 in intraday trade, an extension towards the 1.6500 handle may be imminent. In the absence of a bearish reversal candle pattern longs continue to be preferred.
Traders should also be mindful of key upcoming event risk for the GBP with the Bank of England’s Inflation Report set to cross the wires in the coming hours (see the economic calendar here).
Confirm your chart-based trade setups with the Technical Analyzer.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by David de Ferranti, Market Analyst, FXCM
Contact and follow David on Twitter: @Davidde
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