GBP/USD Technical Analysis – January Top in Sight
To receive Ilya's analysis directly via email, please SIGN UP HERE
- GBP/USD Technical Strategy: Flat
- Support: 1.6562 (38.2% Fib exp.), 1.6443 (23.6% Fib exp.)
- Resistance: 1.6658 (61.8% Fib exp.), 1.6754 (61.8% Fib exp.)
The British Pound continues to race higher against the US Dollar having initiated a recovery as we suspected last week. Buyers are targeting resistance at 1.6658, the 50% Fibonacci expansion, with a break above that aiming for the 61.8% level at 1.6754. Alternatively, a turn back below the 38.2% Fib at 1.6562 exposes the 23.6% expansion at 1.6443.
Prices are too close to relevant resistance to make a long trade at current levels palatable from a risk/reward perspective. Furthermore, we are somewhat skeptical about the longevity of Sterling’s push higher on fundamental grounds. On the other hand, a short trade looks premature absent a defined reversal signal. We will hold off taking directional bets here for the time being.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.