Forex Strategy: GBP/USD Break Below 1.6600 Opens Further Declines
- GBP/USD Technical Strategy: shorts preferred
- Break of 1.6600 opens declines to 1.6455
- Lack of reversal signal puts doubt on bounce
The 1.6660/70 mark has continued to gap gains for the Pound which follows on from a Doji formation on the daily that signaled hesitation amongst the bulls. With prices probing below the psychologically-significant 1.6600 handle, an extended decline towards 1.6455 likely.
It should be noted that the monthly US NFPreport due in the coming hours is likely to spark significant volatility for GBP/USD which could negate technical signals offered. Details available on the economic calendar here.
GBP/USD: Break of 1.6600 Opens Declines To 1.6455
Daily Chart - Created Using FXCM Marketscope 2.0
Examining intraday price action using the four hour chart below; signs of a bullish reversal are lacking. While a Hammer formation near 1.6568 is evident, the signal has failed to receive confirmation.
GBP/USD: Bullish Signal Lacking Near Critical Support
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
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