Forex: GBP/USD Technical Analysis – Channel Resistance Key Ahead
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- GBP/USD Technical Strategy: Flat
- Support: 1.6594 (23.6% Fib exp.), 1.6496 (trend line)
- Resistance: 1.6655-77 (channel top, 38.2% Fib exp.), 1.6744 (50% Fib ret.)
The British Pound continues to recover against the US Dollar having found support at rising trend line set from mid-November. A break above resistance at 1.6594, the 23.6% Fibonacci expansion, has exposed the 1.6655-77 area, marked by the 38.2% level and a rising channel top. Moving further beyond that aims for the 50% Fib at 1.6744. Alternatively, a move back below 1.6594 eyes the trend line (1.6502) anew.
Risk/ reward considerations argue against entering long with prices so close to relevant resistance. On the other hand, the short side looks unattractive without an actionable reversal signal. As such, we will remain on the sidelines and wait for a more attractive setup to emerge.
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.