GBP/USD Technical Analysis – Six-Month Uptrend Broken
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- GBP/USD Technical Strategy: Flat
- Support:1.6696 (“axis” line), 1.6559 (38.2% Fib ret.)
- Resistance:1.6814 (trend line), 1.6920 (May 21 high)
The British Pound is primed for weakness against the US Dollar after prices broke below major trend line support established from November 2013. Prices are now testing “axis” line support at 1.6696, with a break below that exposing the 38.2% Fibonacci retracement at 1.6559. Trend line support-turned-resistance is now at 1.6816, followed by the May 21 high at 1.6920.
Risk/reward considerations argue against entering short with prices sitting squarely at support. On the other hand, taking up the long side seems premature absent a defined bullish reversal signal. We will remain flat for now.
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.