GBP/USD Scope For A Recovery May Be Capped Despite Bullish Pattern
- Strategy: Flat, Short Pending On Close Below 1.5585
- Bullish Signal On The Daily May Have Limited Scope For Follow-Through
- Bearish Engulfing Pattern In Intraday Trade Hints At A Possible Pullback
GBP/USD’s rebound from the range-bottom has produced a Bullish Engulfing pattern on the daily. While considered a key reversal pattern the prospect of further gains may be capped by overhanging resistance at the 1.5800 ceiling.
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
The four hour timeframe is already showing signs of a hesitation from the bulls. A Bearish Engulfing candlestick pattern offers a reversal signal near the 1.5800 range-top. This in turn may be the precursor for a sink back to the recent lows.
GBP/USD: Bearish Pattern Emerges Near Range-Top
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
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