Forex: GBP/USD Technical Analysis – Pound Rebound Hinted Ahead
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- GBP/USD Technical Strategy: Flat
- Support: 1.6548 (trend line), 1.6459 (Mar 24 low)
- Resistance: 1.6638 (trend line), 1.6687 (23.6% Fib exp.)
The British Pound fell against the US Dollar as expected but prices may be readying a reversal upward having formed a Bullish Engulfing candle pattern. Near-term resistance is at 1.6638, marked by a falling trend line set from mid-February, with a break above that exposing the 23.6% Fibonacci expansion at 1.6687. Support is at a rising trend line set from mid-November (now at 1.6548), followed by the March 24 low at 1.6459.
Prices are too close to relevant resistance to justify a long position from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal argues against taking up the short side. We will remain flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com