Forex Strategy: GBP/USD - 1.6670 Mark Puts Brakes On Rally
- 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
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
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
Weekly Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
Follow David on Twitter: @Davidde
To receive David’s analysis directly via email, please sign up here.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.