GBP/USD Technical Analysis: Pound Gears Up for Recovery
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- GBP/USD Technical Strategy: Flat
- Support: 1.6533, 1.6470, 1.6407
- Resistance:1.6599-6612, 1.6661, 1.6762
The British Pound may be ready to launch a recovery against the US Dollar after prices put in a bullish Piercing Line candlestick pattern. Near-term resistance is in the 1.6599-1.6612 area, marked by the 14.6% Fibonacci retracement and a falling trend line set from mid-July. A break above that on a daily closing basis exposes the 23.6% level at 1.6661. Alternatively, a reversal below the 38.2% Fib expansion at 1.6533 clears the way for a challenge of the 50% threshold at 1.6470.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short 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.