Forex: GBP/USD Technical Analysis – Pound Sets New 2014 High
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- GBP/USD Technical Strategy: Flat
- Support: 1.6562 (38.2% Fib exp.), 1.6443 (23.6% Fib exp.)
- Resistance: 1.6658 (50% Fib exp.), 1.6754 (61.8% Fib exp.)
The British Pound continues soar against the US Dollar started a recovery as we suspected last week. Prices are testing above resistance in the 1.6658-67 area marked by the January 24 swing high and the 50% Fibonacci expansion. A daily close above this boundary exposes the 61.8% level at 1.6754. Alternatively, a reversal below 1.6658 sees support at 1.6562, the 38.2% Fib.
Entering long seems premature until a break of resistance is confirmed on a daily closing basis. On the other hand, attempting to pick a top and taking a trade on the short side presupposes current momentum will unravel without any readily apparent evidence. As such, we will remain flat for the time being.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com