GBP/USD Technical Analysis: Opting to Pass on Short Trade
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- GBP/USD Technical Strategy: Flat
- Support: 1.5309, 1.4926, 1.4616
- Resistance: 1.5545, 1.5656, 1.5779
The British Pound declined against the US Dollar as expected, breaking a rising trend line guiding the up move since mid-April. Near-term support at 1.5309, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 38.2% level at 1.4926. Alternatively, a turn above the 14.6% Fib at 1.5545 clears the way for a test of a falling trend line at 1.5656.
While entering short is decidedly tempting, we will begrudgingly opt to stand aside. We already have long-USD exposure via USDCAD and prefer not to compound it ahead of upcoming release of minutes from June’s FOMC meeting. This represents significant event risk that may derail technical positioning and we will wait for it to pass before reconsidering the trade.
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--- 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.