GBP/USD Technical Analysis: January Bottom Threatened
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- GBP/USD Technical Strategy: Flat
- Support: 1.4950, 1.4696, 1.4431
- Resistance: 1.5224, 1.5551, 1.5653
The British Pound broke downward against the US Dollar as expected after putting in a Bearish Engulfing candlestick pattern. A daily close below the January 23 low at 1.4950 exposes the 38.2% Fibonacci expansion at 1.4696. Alternatively, a reversal above the 14.6% level at 1.5224 clears the way for a test of February 26 high at 1.5551.
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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.