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Forex: GBP/USD Technical Analysis – Key Trend Line Under Fire

Forex: GBP/USD Technical Analysis – Key Trend Line Under Fire

2014-03-23 23:19:00
Ilya Spivak, Head Strategist, APAC
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Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support: 1.6469 (61.8% Fib ret., trend line), 1.6386 (76.4% Fib ret.)
  • Resistance: 1.6536 (50% Fib ret.), 1.6604 (38.2% Fib ret.)

The British Pound continued to decline against the US Dollar as expected, with sellers now testing critical support marked by a rising trend line set from mid-November. This barrier is reinforced by the 61.8% Fibonacci retracement at 1.6469, with a break downward initially exposing the 76.4% level at 1.6386. Alternatively, a turn above resistance at 1.6536 – the 50% Fib – targets the 38.2% retracement at 1.6604.

Risk/reward considerations argue against entering short with prices so close to support. On the other hand, taking up the long side looks premature absent a defined reversal signal. We will continue to stand aside until a more actionable setup emerges.

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dailyclassics_gbp-usd_body_Picture_12.png, Forex: GBP/USD Technical Analysis – Key Trend Line Under Fire

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.

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