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Forex Strategy: GBP/USD - 1.6670 Mark Puts Brakes On Rally

Forex Strategy: GBP/USD - 1.6670 Mark Puts Brakes On Rally

David de Ferranti, Currency Analyst

Talking Points

  • GBP/USD Technical Strategy: Sidelines preferred
  • Dojis signal indecision amongst traders in intraday trade
  • Daily remains void of bearish reversal pattern

Following a dip back towards the 1.6600 handle the GBP/USD bulls managed to regain their grip on the pair by the close of trading, resulting in a Doji candlestick formation on the daily. However, the failure to close above resistance at 1.6670 signals some indecision amongst traders and puts further gains into doubt.

GBP/USD: Doji Signals Indecision Near 1.6660/70 mark

Forex-Strategy-GBPUSD-1.6670-Mark-Puts-Brakes-On-Rally_body_Picture_3.png, Forex Strategy: GBP/USD - 1.6670 Mark Puts Brakes On Rally

Daily Chart - Created Using FXCM Marketscope 2.0

Similarly on the four hour chart; several Dojis during intraday trade are further evidence that traders are hesitant to sway prices in one particular direction, leaving a neutral technical bias.

GBP/USD: Dojis Denote Deliberation Amongst Traders

Forex-Strategy-GBPUSD-1.6670-Mark-Puts-Brakes-On-Rally_body_Picture_2.png, Forex Strategy: GBP/USD - 1.6670 Mark Puts Brakes On Rally

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. However, a Piercing Line pattern has also recently emerged and although it awaits confirmation, it suggests the bulls haven’t given up on the pair just yet.

GBP/USD: Bulls Return As Piercing Line Forms on Weekly

Forex-Strategy-GBPUSD-1.6670-Mark-Puts-Brakes-On-Rally_body_Picture_1.png, Forex Strategy: GBP/USD - 1.6670 Mark Puts Brakes On Rally

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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