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GBP/USD Technical Analysis: Pound Sinks to 14-Month Low

GBP/USD Technical Analysis: Pound Sinks to 14-Month Low

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support: 1.5680, 1.5525, 1.5369
  • Resistance: 1.5893, 1.5991, 1.6183

The British Pound overturned signs of an emerging bottom seen over the past three weeks, plunging to a 14-month low against the US Dollar. A daily close below the 1.5680-5720 area (38.2% Fibonacci expansion, June 2013 bottom) exposes the 50% level at 1.5525. Alternatively, a reversal above the 1.5873-93 zone (October 2013 low, 23.6% Fib) clears the way for a test of the 14.6% expansion at 1.5991

Entering short is very tempting from a technical perspective. However, we will tactically opt to stand aside considering the looming event risk represented by the US Employment report, which may drive significant US Dollar volatility and derail technical considerations.

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GBP/USD Technical Analysis: Pound Sinks to 14-Month Low

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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