GBP/USD Technical Analysis: Digesting Trend Line Breach
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- 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.
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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.