GBP/USD Recovery Limited While Bullish Pattern Lacks Confirmation
- Strategy: Short, Stop: 1.5770 (Close), Target: 1.5450
- Hammer Formation Lacking Confirmation
- Bearish Patterns Lacking In Intraday Trade
GBP/USD’s intraday recovery has left a Hammer formation in its wake, which awaits confirmation from an ensuing up-day. However, in the absence of validation and in the presence of a short-term downtrend the immediate risk remains skewed lower. This puts the focus on 1.5585, which if broken may open the 1.5425 floor (the late August ’13 low).
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
The four hour chart paints a slightly divergent picture than the daily. The presence of a Piercing Line formation and absence of bearish signals suggests the prospect of intraday gains. Given the context from the daily, if a bearish pattern were to emerge it would be seen as a fresh shorting opportunity.
GBP/USD: Bounce Produces A Piercing Line Pattern
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
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