GBP/USD Technical Analysis: Rally Rejected at Trend Line
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- GBP/USD Technical Strategy: Flat
- Support: 1.5612, 1.5524, 1.5380
- Resistance: 1.5737, 1.5824, 1.5916
The British Pound advanced against the US Dollar as expected after prices put in a bullish Piercing Line candlestick pattern. A daily close above falling trend line resistance at 1.5737 exposes a horizontal pivot marked by the November 6 low at 1.5824. Alternatively, a reversal below the 14.6% Fibonacci expansion at 1.5612 clears the way for a test of the 23.6% level at 1.5540.
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
--- 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.