GBP/USD Technical Analysis: Initial Long Trade Profit Taken

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Talking Points:

• GBP/USD Technical Strategy: Long at 1.5373
• Support: 1.5395, 1.5322, 1.5180
• Resistance: 1.5573, 1.5737, 1.5923

The British Pound put in a Bearish Engulfing candlestick pattern, hinting a move lower against the US Dollar may be ahead. A daily close below channel support at 1.5395 exposes the 14.6% Fibonacci expansion at 1.5322. Alternatively, a reversal above the 1.5551-73 area (38.2% Fib retracement, channel top) clears the way for a test of the 50% threshold at 1.5737.

We bought GBPUSD at 1.5373 and subsequently booked profit on half of the position. While the Engulfing setup warns of losses, confirmation on a break through channel support is absent. With that in mind, we will remain the second half of the long trade in play and move the stop-loss to breakeven (1.5373).

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Daily Chart - Created Using FXCM Marketscope

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com