Forex: GBP/USD Technical Analysis – Support Above 1.62 in Focus
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- GBP/USD Technical Strategy: Flat
- Support: 1.6260 (50% Fib ret.), 1.6164 (61.8% Fib ret.)
- Resistance: 1.6356 (38.2% Fib ret.), 1.6428 (channel bottom)
Prices declined as expected after putting in a Bearish Engulfing candlestick pattern. The pair is now testing support at 1.6260, the 50% Fibonacci retracement, with a break below that targeting the 61.8% level at 1.6164. Alternatively, a close back above the 38.2% Fib at 1.6356 aims for the underside of a rising channel bottom set from set from mid-December, now at 1.6428.
Risk/reward considering argue against taking a trade with prices in close proximity to near-term support. Alternatively, attempting to pick a bottom and trading the pair to the long side presumes support will hold, which is an assumption that is thus far baseless. As such, we remain sidelined for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
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