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GBP/USD Technical Analysis: First Target Hit on Short Trade

GBP/USD Technical Analysis: First Target Hit on Short Trade

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Talking Points:

The British Pound continues to sink against the US Dollar as expected having broken below trend line supportguiding the exchange rate higher since early May. Prices have now declined for six consecutive sessions, hitting the lowest levels in three months.

A break below support at 1.5309, the 23.6% Fibonacci expansion, has seemingly cleared a downward to the 1.5089-5169 area marked by the May 4 and June 1 swing lows. A further move beneath that eyes the 38.2% level at 1.4926. The 1.5309 threshold has been recast as near-term resistance, with a rebound back above that opening the door for a retest of the aforementioned trend line at 1.5540.

We entered short GBPUSD at 1.5500. The first objectiveat 1.5357 has been met and we have taken profit on half of the position. The remainder of the trade has been left open to capture any further on-coming weakness. The stop-loss has been trailed to the breakeven level (1.5500).

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.