Forex: GBP/USD Technical Analysis – Stalling Near 1.63 Figure
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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.), 1.6442 (channel bottom)
The British Pound declined against the US Dollar as expected after showing a Bearish Engulfing candlestick pattern. Prices are now stalling above support at 1.6260, the 50% Fibonacci retracement, as investors await the BOE policy announcement. A break below support exposes the 61.8% level at 1.6164. Alternatively, a reversal above the 38.2% Fib at 1.6356 targets a rising channel bottom set from set from mid-December at 1.6442.
Back-to-back Hammer candles above support hint a bounce may be ahead, warning against betting on further selling. Confirmation of a turn higher is absent however. This coupled with looming event risk argues against initiating trades for now and we will stand aside.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com