Forex Strategy - GBP/USD Break Below 1.6600 Favors Downside
- GBP/USD Technical Strategy: Shorts Preferred
- Range between 1.6600 and 1.6765/70 broken
- Dark Cloud Cover on weekly warns of larger correction
The Pound has broken its recent trading range between 1.6600 and 1.6770 suggesting further declines may be in store for the currency. This comes following several successive short sessions that suggested conviction was not be strong enough amongst the bulls to push prices back to the 1.6770 top. The break lower opens the 50% Fib Retracement level at 1.6540 and below that a target is offered by the 2014 low at 1.6260.
GBP/USD Breaks Recent Range
Daily Chart - Created Using FXCM Marketscope 2.0
The absence of a bullish reversal signal on the four hour chart suggests 1.6600 may continue to cap gains for GBP/USD during the session ahead.
GBP/USD: 1.6600 Offers Intraday Resistance
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
Weekly Chart - Created Using FXCM Marketscope 2.0
It should be noted that the upcoming FOMC March meeting, Bank of England minutes and UK employment data may negate technical signals offered. Traders can watch live coverage of the FOMC decision in the DailyFX Plus area of the site.
By David de Ferranti, Market Analyst, FXCM
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.