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Forex Strategy - GBP/USD Candles Suggest Bears In Doubt At 1.6600

Forex Strategy - GBP/USD Candles Suggest Bears In Doubt At 1.6600

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

This week will be critical for the Pound as the pair threatens a downside break of the recent trading range. The Doji straddling support at 1.6600 on the daily signifies indecision amongst traders near the range-bottom. Several successive short sessions suggests conviction may not be strong enough amongst the bulls to push prices back to the 1.6770 top.

GBP/USD Signs of Indecision on Daily

Forex-Strategy---GBPUSD-Candles-Suggest-Bears-In-Doubt-At-1.6600_body_Picture_3.png, Forex Strategy - GBP/USD Candles Suggest Bears In Doubt At 1.6600

Daily Chart - Created Using FXCM Marketscope 2.0

While a Bullish Engulfing candlestick pattern on the four hour points to an intraday rally for the pair, sellers sitting at 1.6650 may act to cap further gains.

GBP/USD Range Break Threatened

Forex-Strategy---GBPUSD-Candles-Suggest-Bears-In-Doubt-At-1.6600_body_Picture_2.png, Forex Strategy - GBP/USD Candles Suggest Bears In Doubt At 1.6600

4 Hour 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 is threatening a more significant correction ahead for the Pound. A potential target is offered by the 23.6% Fib Retracement Level near 1.6350.

GBP/USD Weekly Offers Warning

Forex-Strategy---GBPUSD-Candles-Suggest-Bears-In-Doubt-At-1.6600_body_Picture_1.png, Forex Strategy - GBP/USD Candles Suggest Bears In Doubt At 1.6600

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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