GBP/USD Technical Analysis: Sterling Strength Prevails
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- GBP/USD Technical Strategy: Flat
- GBP/USD strength after an extended move last week.
- Short positions could be attractive should resistance show in the 1.5500 zone.
British Pound strength has continued with aggressive price action against USD throughout the week after the sharp bounce off of the 23.6% Fibonacci retracement of the July 2014-April 2015 major move (shown in red-dashed lines on the chart). The strength in the pair over the past week has seen multiple long-term resistance levels yield to surging prices, including the 23.6% retracement of the long-term major move (shown as a green line on the chart, taking the Fib from the 2.1160 high to the financial collapse low at 1.3500), and the 50% retracement of the intermediate-term move (financial collapse low to the July 2014 high).
From here, resistance in the 1.5500 zone could prove attractive, as this offers both prior swing-low support as well as potential resistance from the 50% Fibonacci retracement of the most recent major move (indicated by dashed-gray lines). If 1.5500 yields, then potential resistance at 1.5567 and 1.5600 could become attractive; and if prices break above the 1.5750 psychological level, short stances should be abandoned as higher-highs would then look promising.