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GBP/USD Technical Analysis: Digesting Trend Line Breach

GBP/USD Technical Analysis: Digesting Trend Line Breach

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support: 1.6338, 1.6255, 1.6088
  • Resistance: 1.6486, 1.6621, 1.6755

The British Pound paused to digest gains against the US Dollar after breaking down trend resistance set from mid-July. A daily close above the 1.6459-86 area marked by the March 24 low and the 38.2% Fibonacci retracement exposes the 50% level at 1.6621. Alternatively, a turn back below the trend line – now recast as support at 1.6338 – opens the door for a test of the 23.6% Fib expansion at 1.6255.

While a long position seems tempting, the larger trend pointed downward since prices overturned a 12-month advance in mid-July. As such, we will treat any on-coming move higher as corrective and look for selling opportunities amid the rally rather than buy into it.

Add these technical levels directly to your charts with our Support/Resistance Wizard app!

GBP/USD Technical Analysis: Digesting Trend Line Breach

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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