GBP/USD Technical Analysis: Chart Setup Hints at Upswing
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- GBP/USD Technical Strategy: Pending Short
- Support: 1.6743-56, 1.6698, 1.6653
- Resistance:1.6819, 1.6859, 1.6922
The British Pound may be readying to turn higher in line with our fundamental outlook after completing a bullish Morning Star candlestick pattern. Positive RSI divergence bolsters the case for an upside scenario. Near-term resistance is at 1.6819, the 14.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the 23.6% level at 1.6859. Alternatively, a move through support in the 1.6743-56 area marked by the August 12 low and the 38.2% Fib expansion opens the door for a challenge of the 50% threshold at 1.6698.
Our bias is broadly bearish in line with a break of key trend line support in late July. With that in mind, we will stand aside for now and treat any on-coming gains as corrective, looking for an opportunity to enter short at a more attractive level.
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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.