GBP/USD Technical Analysis: Pound Slumps to 7-Week Low
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- GBP/USD Technical Strategy: Flat
- Support: 1.6822-32, 1.6721, 1.6610
- Resistance:1.6924, 1.6969, 1.7053
The British Pound dropped to the lowest level in seven weeks against the US Dollar having topped as expected after showing a Hanging Man candle with negative RSI divergence. Near-term support is in the 1.6822-32 area, marked by the February 17 high and the 38.2% Fibonacci retracement. A break below that on a daily closing basis exposesthe 50% level at 1.6721.Alternatively, a reversal above rising trend line support-turned-resistance at 1.6924 opens the door for a test ofthe 23.6% Fib at 1.6969.
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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.