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Talking Points:
- GBP/USD Technical Strategy: Flat
- Support: 1.5170, 1.4990, 1.4848
- Resistance: 1.5348, 1.5459, 1.5638
The British Pound put in a Bullish Engulfing candlestick pattern, hinting a recovery against the US Dollar may be ahead. Near-term resistance is at 1.5349, the 14.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 23.6% level at 1.5459. Alternatively, a reversal above the June 1 low at 1.5170 opens the door for a challenge of a horizontal pivot at 1.4990.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short 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