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GBP/USD Technical Analysis: Opting Against Entering Short

GBP/USD Technical Analysis: Opting Against Entering Short

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support: 1.5950, 1.5786, 1.5685
  • Resistance:1.6113, 1.6215, 1.6296

The British Pound plunged to the lowest level in close to 10 months against the US Dollar amid Scottish Independence referendum jitters. Near-term support is at 1.5950, the 100% Fibonacci expansion, with a break below that on a daily closing basis exposing the 123.6% level at 1.5786. Alternatively, a reversal above the 76.4% Fib at 1.6113 clears the way for a challenge of the 61.8% expansion at 1.6215.

While entering short is tempting, the proximity of high-profile commentary from BOE officials warns a sharp recovery may materialize as Scotland-inspired selling gives way to rate hike speculation if hawkish cues emerging in Augusts’ MPC meeting minutes are sustained. With that in mind, we will stand aside.

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GBP/USD Technical Analysis: Opting Against Entering Short

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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