GBP/USD Technical Analysis: Readying to Turn Downward?

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Talking Points:

• GBP/USD Technical Strategy: Flat
• Support: 1.5278, 1.5141, 1.5031
• Resistance: 1.5551, 1.5784, 1.5928

The British Pound may be preparing to correct lower against the US Dollar after putting in a bearish Dark Cloud Cover candlestick pattern. Near-term support is at 1.5278, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing 38.2% level at 1.5141. Alternatively, a move below the February 26 high at 1.5551 opens the door for a challenge of the 123.6% Fib extension at 1.5784.

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 an actionable opportunity to present itself.

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Daily Chart - Created Using FXCM Marketscope

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