GBP/USD Technical Analysis: Profit Booked on Short Position
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- GBP/USD Technical Strategy: Flat
- Pound Launches Sharp Rebound, Erases a Week’s Worth of Losses in 2 Days
- Profits Booked on Short Position from 1.55, New Selling Opportunities Sought
The British Pound launched a sharp recovery against the US Dollar, with prices erasing nearly all of last week’s losses in just two trading days. Overall positioning looks bearish in the context of the break through three-month rising trend line support on August 26, painting the current move higher as corrective.
From here, break above the 38.2% Fibonacci retracement on a daily closing basis opens the door for a challenge the 50% level at 1.5491. Alternatively, a turn below the 23.6% Fib at 1.5318 clears the way for a test of the 14.6% retracement at 1.5259.
We sold GBPUSD at 1.5500 and have since booked profit on half of the position. The strong momentum behind the recovery over the past two sessions has us concerned about on-coming upside follow-through, particularly as the BOE monetary policy announcement looms ahead. With that in mind, we will exit the remainder of the trade at this point and wait for another opportunity to sell the pair anew.
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