Forex: GBP/USD Technical Analysis – Waiting to Confirm Reversal
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- GBP/USD Technical Strategy: Flat
- Support: 1.6598 (23.6% Fib exp.), 1.6548 (38.2% Fib exp.)
- Resistance: 1.6683 (Mar 31 high), 1.6742 (Feb 14 close)
The British Pound may be carving a top below the 1.67 figure against the US Dollar after prices completed a Bearish Engulfing candlestick pattern. A breach below the 23.6% Fibonacci expansion at 1.6598 initially clears the way for a test of the 38.2% level at 1.6545. Alternatively, a move above resistance at the March 31 high (1.6683) exposes the February 14 close at 1.6742.
A series of false starts to the downside has been cut short over recent months and we will opt to wait for confirmation of a larger reversal before entertaining a short position. A daily close below rising trend line support set from mid-November (now at 1.6528) would go a long way toward bolstering our confidence in the downside scenario.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com