GBP/USD Recovery Stalls As Dojis Suggest Bulls Lacking Conviction
- GBP/USD Technical Strategy: Shorts Preferred
- Dojis Suggest Hesitation From Bulls To Push Higher
- Daily Close Below 1.6660 Required To Open 1.6550
GBP/USD’s recovery has stalled with several Dojis near the 1.6730 ceiling denoting hesitation from the bulls to lead the pair higher. Recent price action remains suggestive of a short-term downtrend which leaves the immediate risk lower. A daily close below 1.6660 would re-open the April lows near 1.6550. However, the surge in real trading volume may warn of the potential for a more sustained reversal - a pattern evident over recent months for the Pound.
Traders should note the upcoming UK inflation data has the potential to spark significant swings for the Pound.
GBP/USD: Dojis Suggest Bulls Lacking Conviction
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
The four hour chart tells a similar narrative to the daily. Several Doji candlesticks near 1.6760 were the precursor to the intraday correction for the Pound. With bullish reversal signals lacking, the scene may be set for a descent on the recent lows near 1.6660.
GBP/USD: Intraday Correction Occurs Post Doji Formations
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
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