GBP/USD Technical Analysis – May High Under Pressure
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- GBP/USD Technical Strategy: Flat
- Support:1.6960 (50% Fib exp.), 1.6897 (38.2% Fib exp.)
- Resistance:1.6996-1.7023 (May 6 high, 61.8% Fib exp.), 1.7102 (76.4% Fib exp.)
The British Pound is poised to test May’s swing high against the US Dollar having soared after supportive comments from BOE Governor Carney last week. Near-term resistance is in the 1.6996-1.7023 area, marked by the May 6 peak and the 61.8% Fibonacci expansion. A break above the latter level on a daily closing basis exposes the 76.4% Fib at 1.7102. Support comes in at 1.6960, the 50% expansion, with a reversal below that clearing the way for a test of the 38.2% threshold at 1.6897.
The available trading range is too narrow to justify a trade on the long side from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal warns against taking up the short side. We will remain on the sidelines 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.