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GBP/USD To Extend Gains On Bullish Candlestick Formation

GBP/USD To Extend Gains On Bullish Candlestick Formation

2014-07-03 11:49:00
David de Ferranti, Currency Analyst
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Talking Points

  • GBP/USD Technical Strategy: Longs Preferred
  • Morning Starsuggests potential for further gains
  • Bearish patterns remain absent on the daily

A push higher for the Pound looks promising following a Morning Star formation on the daily. Similarly, we have not seen a spike in retail trading volume, which often indicates a potential reversal. With recent levels not witnessed since 2008, definitive areas of resistance are not easily identifiable. This suggests traders may defer to psychologically-significant handles to look at taking profits and puts 1.7200 on the radar.

Traders should note the upcoming US NFPs report hold the potential to spark significant volatility for GBP/USD, which could act to negate technical signals offered.

GBP/USD: Morning Star Heralded Upside Breakout

GBP/USD To Extend Gains On Bullish Candlestick Formation

Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

Drilling down to the four hour chart; a Bearish Engulfing pattern has found little follow-through in Asian trading, suggesting the bulls remain in control for the time-being. A break above 1.7170 would open the 1.7200 handle.

GBP/USD: Bearish Engulfing Pattern Finds Little Follow-Through

GBP/USD To Extend Gains On Bullish Candlestick Formation

4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

By David de Ferranti, Currency Analyst, DailyFX

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