GBP/USD: Bearish Sub 1.7000 Post Candlestick Reversal Pattern
- GBP/USD Technical Strategy: Shorts Preferred
- Dark Cloud Cover offers bearish reversal signal
- Doji insufficient to suggest bounce at this stage
GBP/USD’s retreat from the 1.7040 mark has yielded a Dark Cloud Cover pattern, which offers an ominous warning for the pair. The daily close below 1.7000 offers confirmation of the signal and suggests enough conviction amongst the bears to open the 1.6900 mark. While a Doji candlestick hints at some indecision, it may be insufficient to provoke a recovery.
GBP/USD: Dark Cloud Cover Sets Up Further Declines
Daily Chart - Created Using FXCM Marketscope 2.0
Drilling down to the four hour chart; a Hammer pattern heralded the return of the bulls and a retest of support-turned-resistance at 1.7000. With several Dojis having now emerged, the pair may have lost steam near the psychologically-significant level. A pullback in intraday trade would likely be met by buyers at the 1.6940 mark.
4 Hour Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, DailyFX
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