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Talking Points:
- GBP/USD Technical Strategy: Short at 1.6233
- Support: 1.6088, 1.5954, 1.5819
- Resistance: 1.6255, 1.6340, 1.6486
The British Pound appears to have resumed its descent against the US Dollar after a brief correction higher from September’s lows. Near-term support is at 1.6088, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis exposing the 50% level at 1.5954. Alternatively, a reversal back above the 23.6% Fib at 1.6255 clears the way for a challenge of falling trend line resistance at 1.6340.
Positioning appears attractive from a technical and a risk/reward perspective and we will now enter short GBPUSD, initially targeting 1.6088. A stop-loss will be activated on a daily close above 1.6388. We will take profit on half of the position and move the stop-loss to breakeven once the first objective is reached.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
