GBP/USD Pushes Higher As Traders Look Past Doji Candlestick
- GBP/USD Technical Strategy: Longs Preferred
- Further gains possible in absence of bearish signal
- Dojis on the daily and four hour charts hinted at a bounce
After teasing at a breakout above the critical 1.6820 mark in European trading yesterday, the Pound gave back much of its gains, resulting in the formation of a Doji candlestick on the daily. While typically a sign of indecision amongst traders, it has failed to stir the bears. A daily close above 1.6820 would offer new long opportunities with definitive resistance at the November 2009 high near 1.6870.
GBP/USD: Aiming At 1.6870
Daily Chart - Created Using FXCM Marketscope 2.0
Intraday price action reveals a drawn-out struggle between the bulls and bears between 1.6750 and 1.6840. While it appeared that the bulls had won out following the pop above 1.6840, the pair was quick to retrace much of its gains signaling a lack of conviction amongst traders.
GBP/USD: Evening Star Fails To Receive Confirmation
4 Hour Chart - Created Using FXCM Marketscope 2.0
The Piercing Line pattern on the weekly helped to herald the return of the bulls. The perspective from the daily chart helps highlight the significance of the recent breakout to multi-year highs.
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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