GBP/USD Technical Analysis – Resistance Now Above 1.71
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- GBP/USD Technical Strategy: Flat
- Support:1.6961-96, 1.6859, 1.6765
- Resistance:1.7128, 1.7263, 1.7398
The British Pound is treading water against the US Dollar after clearing the 1.70 figure and rising to the strongest level in nearly five years. Resistance is now at 1.7128, the 38.2% Fibonacci expansion. A daily close above that initially targets the 50% level at 1.7263. Alternatively, a turn below support in the 1.6961-96 area – marked by the 23.6% Fib and the May 6 high – opens the door for a test of the 14.6% level at 1.6859.
We will tactically opt not to enter long. A strong correlation between GBPUSD and the UK-US 2-year bond yield spread (0.90 on 20-day studies) puts the spotlight on the policy outlook just a key round of testimony from BOE officials looms ahead. We will wait for this event risk to pass and reassess positioning before committing to a trade.
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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.