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GBP/USD Technical Analysis: Waiting to Enter Short Trade

GBP/USD Technical Analysis: Waiting to Enter Short Trade

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support: 1.5464, 1.5289, 1.5170
  • Resistance: 1.5647, 1.5794, 1.5941

The British Pound moved higher against the US Dollar as expected after producing a Bullish Engulfing candlestick pattern. A daily close above the38.2% Fibonacci expansionat 1.5647 exposes the 50% level at 1.5794. Alternatively, a turn below the 23.6% Fib at 1.5464 opens the door for a challenge of trend line resistance-turned-support at 1.5289.

A long trade is tempting from a purely technical perspective but we will tactically opt to stand aside. Longer-term positioning seems to broadly favor USD strength against the Pound, suggesting any on-coming gains are likely to be corrective. With that in mind, we will wait until the upswing yields a selling opportunity.

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GBP/USD Technical Analysis: Waiting to Enter Short Trade

--- 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.

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