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GBP/USD Technical Analysis: Five-Month Down Trend at Risk

GBP/USD Technical Analysis: Five-Month Down Trend at Risk

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support: 1.5277, 1.5188, 1.5000
  • Resistance: 1.5359, 1.5479, 1.5806

The British Pound vaulted sharply higher against the US Dollar, with buyers moving to challenge resistance guiding the down trend since mid-September. Channel top resistance is at 1.5359, with a break above that on a daily closing basis exposing the 23.6% Fibonacci retracement at 1.5479. Alternatively, a reversal below the 14.6% level at 1.5277 clears the way for a test of shorter-term channel resistance-turned-support at 1.5188.

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 long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.

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GBP/USD Technical Analysis: Five-Month Down Trend at Risk

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.

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