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GBP/USD Technical Analysis: Topping Below 1.72 Figure?

GBP/USD Technical Analysis: Topping Below 1.72 Figure?

2014-07-10 02:45:00
Ilya Spivak, Sr. Currency Strategist
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Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support:1.7108, 1.7064, 1.6993
  • Resistance:1.7180, 1.7234, 1.7322

The British Pound may be carving out a top against the US Dollar as prices show a Hanging Man candlestick coupled with negative RSI divergence. A break below the 14.6% Fibonacci retracement at 1.7108 on a daily closing basis initially exposes the 23.6% level at 1.7064. Alternatively, a reversal above the 61.8% Fib expansion at 1.7180 opens the door for a test of the 76.4% threshold at 1.7234.

Risk/reward considerations argue against entering short with prices sitting in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now.

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GBP/USD Technical Analysis: Topping Below 1.72 Figure?

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.

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