GBP/USD Technical Analysis: Pound Drops to 14-Month Low
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- GBP/USD Technical Strategy: Flat
- Support: 1.5663, 1.5576, 1.5490
- Resistance: 1.5770, 1.5837, 1.5944
The British Pound continued to push downward in the aftermath of a dovish BOE Quarterly Inflation Report, hitting a 14-month low against the US Dollar. Near-term support is at 1.5663, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis exposing the 50% level at 1.5576. Alternatively, a reversal above the 23.6% Fib at 1.5770 opens the door for a challenge of the 14.6% expansion at 1.5837.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com