Forex: GBP/USD Technical Analysis – Short Trade Making Progress
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- GBP/USD Technical Strategy: Short at 1.6710
- Support: 1.6593 (23.6% Fib ret.), 1.6452 (38.2% Fib ret.)
- Resistance: 1.6690 (trend line), 1.6742 (Feb 14 close)
We entered short GBP/USD at 1.6710 after prices put in a Bearish Engulfing candlestick pattern below resistance at 1.6742, the February 14 close. Negative RSI divergence has reinforced the probability for a downside scenario. Prices have started to make progress downward, taking out minor rising trend line support to clear a path to our initial objective at 1.6593, the 23.6% Fibonacci retracement. A daily close below this barrier will expose the next objective at 1.6452, the 38.2% level. Alternatively, a turn back above the trend line (now at 1.6690) aims for 1.6742 anew. We continue to hold, with a stop-loss set to activate a daily close above the February 17 high at 1.6822.
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.