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Forex Strategy - GBP/USD Range-Bottom At 1.6600 In Focus

Forex Strategy - GBP/USD Range-Bottom At 1.6600 In Focus

David de Ferranti, Currency Analyst

Talking Points

  • GBP/USD Technical Strategy: Sidelines Preferred
  • Range between 1.6600 and 1.6765/70 intact
  • Dark Cloud Cover on weekly warns of larger correction

The range between 1.6600 and 1.6765/70 for the Pound remains in force. While a test of the range-top looked possible yesterday, sellers at the 50% Fib Retracement level at 1.6690 acted to cap the GBP/USD’s advance. This has resulted in a Bearish Engulfing candlestick pattern that is threatening a break of the range-bottom at 1.6600.

GBP/USD Range Remains Intact

Forex_Strategy_-_GBPUSD_Range-Bottom_At_1.6600_In_Focus_body_Picture_3.png, Forex Strategy - GBP/USD Range-Bottom At 1.6600 In Focus

4 Hour Chart - Created Using FXCM Marketscope 2.0

A break below 1.6600 may open up the 50% Fib Retracement level on the daily at 1.6536.

GBP/USD Signs of Indecision on Daily

Forex_Strategy_-_GBPUSD_Range-Bottom_At_1.6600_In_Focus_body_Picture_2.png, Forex Strategy - GBP/USD Range-Bottom At 1.6600 In Focus

Daily Chart - Created Using FXCM Marketscope 2.0

The ominous Dark Cloud Cover formation on the weekly at multi-year resistance also remains on the radar, and may be warning of a more significant correction ahead for the Pound.

GBP/USD Weekly Warns of Declines

Forex_Strategy_-_GBPUSD_Range-Bottom_At_1.6600_In_Focus_body_Picture_1.png, Forex Strategy - GBP/USD Range-Bottom At 1.6600 In Focus

Weekly Chart - Created Using FXCM Marketscope 2.0

By David de Ferranti, Market Analyst, FXCM

Follow David on Twitter: @Davidde

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

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