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Talking Points:
- GBP/USD Technical Strategy: Flat
- Support: 1.5293, 1.5177, 1.5034
- Resistance: 1.5409, 1.5493, 1.5553
The British Pound continues to probe lower against the US Dollar after starting January with the largest daily decline since mid-2010. A daily close below the 50% Fibonacci expansion at 1.5293 exposes the 61.8% level at 1.5177. Alternatively, a turn back above the 38.2% Fib at 1.5409 clears the way for a test of channel floor support-turned-resistance at 1.5493.
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
