GBP/USD Technical Analysis: 1-Month Down Trend Broken
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- GBP/USD Technical Strategy: Flat
- Support: 1.5703, 1.5587, 1.5487
- Resistance: 1.5823, 1.5967, 1.6201
The British Pound advanced against the US Dollar as expected after prices produced a bullish Morning Star candlestick pattern. A daily close above the 14.6% Fibonacci retracementat 1.5823 exposes the 23.6% level at 1.5967. Alternatively, a turn below falling trend line resistance-turned-support at 1.5703 clears the way for a test of the November 19 low at 1.5587.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short 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