GBP/USD Technical Analysis: Downturn Clues Still Present
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- 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 trading 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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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com