GBP/USD Technical Analysis: Pound Drops Most in 6 Weeks
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- GBP/USD Technical Strategy: Flat
- Support: 1.5121, 1.4976, 1.4888
- Resistance: 1.5265, 1.5354, 1.5498
The British Pound declined against the US Dollar as expected after prices produced a bearish Dark Cloud Cover candlestick pattern. A daily close below the 38.2% Fibonacci expansion at 1.5121 exposes the 1.4976-1.5004 area (38.2% level, range top resistance-turned-support). Alternatively, a turn above the 23.6% Fib at 1.5265 clears the way for a test of the 14.6% Fib at 1.5354.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain 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.