GBP/USD Technical Analysis: 5-Month Resistance Under Fire
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- GBP/USD Technical Strategy: Flat
- Support: 1.5540, 1.5447, 1.5213
- Resistance: 1.5714, 1.5825, 1.5930
The British Pound is attempting to turn higher against the US Dollar as expected after putting in a bullish Piercing Line candlestick pattern. A daily close above falling trend line resistance set from mid-July – now at 1.5714 – exposes the November 27 high at 1.5825. Alternatively, a reversal below the December 8 low at 1.5540 clears the way for a test of the 23.6% Fibonacci expansion at 1.5447.
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
--- 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.