GBP/USD Technical Analysis: Readying to Turn Lower?
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- GBP/USD Technical Strategy: Flat
- Support: 1.5794, 1.5647, 1.5464
- Resistance: 1.5941, 1.6124, 1.6418
The British Pound advanced against the US Dollar as expected but a bearish Evening Star candlestick pattern hints a turn lower may now be ahead. Near-term support is at 1.5794, the 50% Fibonacci expansion, with a break below that on a daily closing basis exposing the 38.2% level at 1.5647. Alternatively, a turnabove the 61.8% Fib at 1.5941 clears the way for a test of the 76.4% expansion at 1.6124.
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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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com