GBP/USD Technical Analysis: Short Position Remains in Play
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- GBP/USD Technical Strategy: Short at 1.6233
- Support: 1.6066, 1.5868, 1.5720
- Resistance: 1.6122, 1.6184, 1.6377
The British Pound may be setting up for a move higher against the US Dollar after producing a bullish Piercing Line candlestick pattern. The outlines of a falling wedge chart formation and positive RSI divergence reinforce the case for an upside scenario. A daily close above the wedge top at 1.6122 exposes the 23.6% Fibonacci retracement at 1.6184. Alternatively, a turn below the 14.6% level at 1.6066 clears the way for a challenge of the 1.5868-76 area marked by the wedge floor and the October 2013 low.
We sold GBPUSD at 1.6233and have since taken profit on half of our exposure. The rest remains open to capture any further downside momentum in the event the wedge setup fizzles, with a stop-loss at the breakeven level (1.6233).
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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.