GBP/USD Technical Analysis: 3-Month Down Trend Overturned
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- GBP/USD Technical Strategy: Flat
- Support: 1.5706, 1.5600, 1.5540
- Resistance: 1.5772, 1.5916, 1.6032
The British Pound moved higher against the US Dollar as expected after prices completed a bullish Piercing Line candlestick pattern. Near-term resistance is at 1.5772, the 23.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the 38.2% level at 1.5916. Alternatively, a turn below falling trend line resistance-turned-support at 1.5706 opens the door for a challenge of the December 15 low at 1.5600.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short side is premature. With that in mind, we will remain flat for now.
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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.