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Talking Points:
- GBP/USD Technical Strategy: Flat
- Support: 1.5498, 1.5309, 1.4926
- Resistance: 1.5589, 1.5659, 1.5814
The British Pound declined against the US Dollar as expected after prices produced a bearish Evening Star candlestick pattern. Near-term support is in the 1.5498-1.5545 area (April 27 high, 14.6% Fibonacci expansion), with a break below that on a daily closing basis exposing the 23.6% level at 1.5309. Alternatively, a turn above trend line support-turned-resistance at 1.5589 clears the way for a test of a horizontal pivot at 1.5659.
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
