GBP/USD Technical Analysis: Passing on Short Trade Setup
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- GBP/USD Technical Strategy: Flat
- Support: 1.5680, 1.5525, 1.5369
- Resistance: 1.5893, 1.5991, 1.6183
The British Pound corrected cautiously higher against the US Dollar after prices plunged to the lowest level in 14 months last week. Near-term resistance is in the 1.5873-93 area (October 2013 low, 23.6% Fibonacci expansion), with a break above that on a daily closing basis exposing the 14.6% level at 1.5991. Alternatively, a push through support in the 1.5680-5720 zone (38.2% Fib, June 2013 bottom) opens the door for a challenge of the 50% expansion at 1.5525.
While entering short is tempting, we will tactically opt to stand aside for now. The looming release of the Bank of England Quarterly Inflation Report represents a defining bit of policy-defining news flow and we prefer to wait for the outcome before committing to a direction.
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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.