GBP/USD Technical Analysis – Bounce to Offer Short Setup
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- GBP/USD Technical Strategy: Pending Short
- Support:1.6691 (“axis” line), 1.6650 (channel floor), 1.6559 (38.2% Fib ret.)
- Resistance:1.6840-56 (trend line, channel top), 1.6920 (May 21 high)
The British Pound recoiled upward from “axis” line support set from mid-February but the advance appears corrective in the context of a larger down move. The bulls now aim to challenge the 1.6840-56 area, marked by the top of a falling channel established from the May swing high and rising trend line support-turned-resistance set from mid-November 2013. A break higher clears the way for a challenge of the May 21 high at 1.6920. Alternatively, a daily close below the “axis” line at 1.6691 exposes the channel bottom at 1.6650, followed by the 38.2% Fibonacci retracement at 1.6559.
We are looking at the current move higher as an opportunity to enter short but an actionable bearish reversal signal is absent for the time being. As such, we will continue to wait on the sidelines.
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.