GBP/USD Retreats To Range-Bottom As Bullish Pattern Falls Flat
- Strategy: Flat, Short Pending On Close Below 1.5585
- Bullish Signal On The Daily Falls Flat Following Pullback
- Dojis Suggest Indecision From Traders Near Range-Bottom
GBP/USD’s whipsaw back towards its range-bottom has left a Bullish Engulfing formation lacking confirmation. This leaves a close below 1.5585 desired to open the door to more significant declines. A potential downside target would be offered by the late August 2013 low near 1.5425.
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
The four hour timeframe offered an early warning sign of a potential pullback in the form of a Bearish Engulfing candlestick pattern. In more recent trade an ensemble of Doji formations near the range-bottom suggests the bears are reluctant to drag the pair lower. Yet an absence of key reversal signals casts doubt on the prospect of a corrective bounce.
GBP/USD: Dojis Suggest Indecision Near Range-Bottom
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
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