GBP/USD Technical Analysis: Support Above 1.56 in Focus
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- GBP/USD Technical Strategy: Flat
- Support: 1.5631, 1.5519, 1.5337
- Resistance: 1.5801, 1.6021, 1.6241
The British Pound declined against the US Dollar as expected after prices produced a Bearish Engulfing candlestick pattern. A daily close below the 14.6% Fibonacci retracement at 1.5631 exposes the 1.5519-51 area (23.6% level, February 26 high). Alternatively, a reversal above the 76.4% Fib at 1.5801 clears the way for a test of the 100% expansion at 1.6021.
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