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Breaking news

Bank of England Tapers QE Purchases, leaves Bank Rate & APF Target Unchanged

GBP/USD Morning Star May Have Limited Scope For Follow-Through

GBP/USD Morning Star May Have Limited Scope For Follow-Through

David de Ferranti, Currency Analyst

Talking Points

  • GBP/USD Technical Strategy: Sidelines Preferred
  • Morning Star May Find Limited Follow-Through
  • H4 Suggests Cautious Approach By The Bulls

GBP/USD’s recovery has generated a Morning Star formation which awaits validation from an ensuing up-session. Although a bullish signal, the potential for a sustained advance may be limited given recent reversal patterns have found limited follow-through. A daily close above 1.6170 would be required to open the potential for a run on the recent 1.6400 peak.

GBP/USD: Morning Star May Have Limited Scope For Follow-Through

GBP/USD Morning Star May Have Limited Scope For Follow-Through

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

The four hour chart offered an early hint at a potential reversal for the Sterling in the form of a Harami pattern. The string of recent short-body sessions suggests a cautious return by the bulls rather than a stampede. Yet an absence of bearish reversal signals leaves a correction over the session ahead as questionable.

GBP/USD: Short Body Candles Suggests Cautious Approach By Traders

GBP/USD Morning Star May Have Limited Scope For Follow-Through

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

By David de Ferranti, Currency Analyst, DailyFX

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