GBP/USD Awaiting Validation Of Key Reversal Pattern
- Strategy: Flat
- Bullish EngulfingFormation Awaiting Confirmation
- H4 Chart Doji Reveals Hesitation From The Bulls
GBP/USD’s climb above the 1.5880 barrier has produced a Bullish Engulfingformation, which awaits confirmation from a successive up-session. If received it may herald a revisit of the former range-highs near 1.6170. Yet with signs of a short-term downtrend intact, a sustained recovery may prove challenging.
Below 1.5880 skews the risks towards the Mid-September 2013 low near 1.5770.
Traders should note the upcoming Bank of England Inflation Report and UK Employment Data hold the potential to spark significant intraday volatility for the Sterling. This may negate technical signals offered.
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
A Dojion the four hour chart has offered an early signal of exhaustion from the bulls. Yet the absence of more definitive reversal signals casts doubt on a potential correction over the session ahead.
GBP/USD: Doji Suggests Exhaustion From The Bulls
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
Follow David on Twitter: @DaviddeFe
To receive David’s analysis directly via email, please sign up here.
Learn how to read candlesticks to help identify trading opportunities with the DailyFX Candlesticks Video Course.