GBP/USD Eyes 1.6600 As Doji Prompts Bears To Emerge
- GBP/USD Technical Strategy: Shorts Preferred
- Bulls retreat following Doji formation on the daily
- Support likely to emerge at 1.6660/2
GBP/USD has continued its slide in recent trading which follows on from a Doji candlestick on the daily. The candlestick pattern generally denotes indecision amongst traders, and in this case offered an early warning that the bulls were losing steam, which was made more noteworthy by a test of the 2014 highs near 1.6800. With a bullish reversal signal seemingly absent on the daily, the pair may in store for further declines, with buyers likely to emerge at interim support near 1.6660 with an eventual drop to 1.6600 looking likely.
GBP/USD: Bears Take Control Post Doji Candlestick
Daily Chart - Created Using FXCM Marketscope 2.0
Examining intraday price action using the four hour chart; a Dark Cloud Cover formation near resistance at 1.6815 further cements a bearish bias. The presence of a Piercing Line pattern in trading yesterday has been overlooked by traders, which is likely due to the context provided by the daily.
GBP/USD: Dark Cloud Cover Furthers Bearish Bias
4 Hour Chart - Created Using FXCM Marketscope 2.0
This week’s gains for the pound have acted to negate the Dark Cloud Cover formation that had appeared near multi-year resistance for GBP/USD. The rally has arisen following a Piercing Line pattern which signaled the bulls were returning to the Cable. 1.6770 remains a critical level of resistance for the GBP/USD, given it has failed to close above the mark since 2008.
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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