GBP/USD Technical Analysis: Pound Begins Cautious Recovery
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- GBP/USD Technical Strategy: Pending Short
- Support: 1.6676, 1.6625, 1.6573
- Resistance:1.6739, 1.6778, 1.6842
The British Pound turned higher as expected against the US Dollar after producing a Hammer candlestick coupled with positive RSI divergence. Near-term resistance is at 1.6739, the 23.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 14.6% level at 1.6778. Alternatively, a turn below the 38.2% Fib at 1.6676 clears the way for a challenge of the 50% expansion at 1.6625.
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.