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GBP/USD Technical Analysis: Pound Slumps to 5-Month Low

GBP/USD Technical Analysis: Pound Slumps to 5-Month Low

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support: 1.6459-79, 1.6378, 1.6296
  • Resistance:1.6542, 1.6599, 1.6643

The British Pound turned lower anew against the US Dollar, sinking to the weakest level in over five months. Near-term support is in the 1.6459-79 area, marked by the March 24 swing low and the 23.6% Fibonacci expansion. A break below that on a daily closing basis exposes the 38.2% level at 1.6378. Alternatively, a reversal above the 14.6% Fib at 1.6542 clears the way for a challenge of falling trend line resistance at 1.6599.

Risk/reward considerations argue against entering short with prices 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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GBP/USD Technical Analysis: Pound Slumps to 5-Month Low

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.

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