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GBP/USD Technical Analysis: Key Channel Support Broken

GBP/USD Technical Analysis: Key Channel Support Broken

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support: 1.5322, 1.5180, 1.5117
  • Resistance: 1.5426, 1.5551, 1.5601

The British Pound broke downward against the US Dollar as expected after putting in a Bearish Engulfing candlestick pattern. A daily close below the 14.6% Fibonacci expansion at 1.5322 exposes the 23.6% level at 1.5180. Alternatively, a reversal above channel floor support-turned-resistance at 1.5422 clears the way for a test of the 38.2% Fib retracement at 1.5551.

We entered long GBPUSD at 1.5373 and subsequently booked profit on half of the position. The remainder of the trade has now closed at the breakeven level. Prices are now too close to support to justify entering short from a risk/reward perspective and we will stay 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.

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