GBP/USD Technical Analysis: Wedge Confirmation Pending
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- GBP/USD Technical Strategy: Flat
- Support: 1.5770, 1.5663, 1.5576
- Resistance: 1.5837, 1.5978, 1.6076
The British Pound may be laying the groundwork for a turn higher against the US Dollar as prices carve out a Falling Wedge chart formation. A daily close above the 14.6% Fibonacci expansion at 1.5837 exposes the November 11 high at 1.5944, a barrier reinforced by the Wedge top at 1.5978. Alternatively, a turn below the intersection of the 23.6% Fib and the Wedge floor at 1.5770 clears the way for a test of the 38.2% level at 1.5663.
On one hand, confirmation of upward reversal requires a definitive break of the Wedge top on a daily closing basis. On the other, risk/reward considerations argue against a tactical short trade considering prices are sitting squarely at support. With that in mind, we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com