Forex: GBP/USD Technical Analysis – Signs of Topping Emerge
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- GBP/USD Technical Strategy: Flat
- Support: 1.6658-67 (Jan 24 high, 50% Fib exp.), 1.6562 (38.2% Fib exp.)
- Resistance: 1.6658 (50% Fib exp.), 1.6754 (61.8% Fib exp.)
The British Pound may be readying to turn lower against the US Dollar after prices put in a Shooting Star candlestick below resistance at 1.6754, the 61.8% Fibonacci expansion. A break below initial support in the 1.6658-67 area – marked by the January 24 swing high and the 50% Fib – aims for the 38.2% level at 1.6562. Alternatively, a push above resistance exposes the 76.4% expansion at 1.6873.
The Shooting Star setup requires confirmation to be actionable, so a short position is premature at this stage. Needless to say, a long trade seems like a risky proposition given the risk of possible reversal and adverse risk/reward parameters as prices hover in close proximity to resistance. 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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.