GBP/USD Technical Analysis: Digesting Drop to 14-Month Low
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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 paused to consolidate losses after plunging to a 14-month low beneath the 1.58 figure 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 seems attractive from a technical perspective but we will tactically opt against taking on the trade. The upcoming publication of the Bank of England Quarterly Inflation Report may mark a pivotal moment for monetary policy bets, throwing off chart-based direction cues. With that in mind, we will stand aside for now.
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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.