GBP/USD Technical Analysis: All Eyes on Channel Support
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- GBP/USD Technical Strategy: Long at 1.5373
- Support: 1.5408, 1.5322, 1.5180
- Resistance: 1.5573, 1.5784, 1.5923
The British Pound may be preparing to move lower against the US Dollar after prices produced a Bearish Engulfing candlestick pattern. Near-term channel support at 1.5408, with a break below that on a daily closing basis exposing the 14.6% Fibonacci expansion at 1.5322. Alternatively, a turn above the 1.5551-84 area (38.2% Fib retracement, channel top) clears the way for a test of the 50% threshold at 1.5737.
We entered long GBPUSD at 1.5373and subsequently booked profit on half of the position. While the Engulfing pattern hints at on-coming losses, the setup lacks confirmation on a break through channel support for now. With that in mind, we will keep the second half of the long trade open with a stop-loss at the breakeven level (1.5373).
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com