Forex: GBP/USD Technical Analysis – Struggling to Build Above 1.64
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- GBP/USD Technical Strategy: Flat
- Support: 1.6349 (23.6% Fib ret.), 1.6258 (Feb 5 low)
- Resistance: 1.6410 (38.2% Fib ret.), 1.6459 (50% Fib ret., channel bottom)
The British Pound marked a top against the US Dollar as expected having shown a Bearish Engulfing candlestick pattern. The UK unit began a recovery following a series of back-to-back indecision candles as we suspected last week, with prices now testing resistance at 1.6410 marked by the 38.2% Fibonacci retracement. A break above this barrier exposes 1.6459, the intersection of rising channel support-turned-resistance and the 50% Fib. Alternatively, a reversal below the 23.6% retracement at 1.6349 targets the February 5 low at 1.6258.
Risk/reward considerations argue against taking a trade at current levels. The long side is unattractive as prices linger squarely below resistance while a short position lacks adequate confirmation of a downside reversal to be actionable. We will remain on the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com