Tuesday, May 27, 2014

GBP/USD Technical Analysis ? 4-Month Support Under Fire




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Talking Points:



  • GBP/USD Technical Strategy: Flat


  • Support:1.6808 (trend line), 1.6711 (38.2% Fib ret.)


  • Resistance:1.6920 (May 21 high), 1.6996 (May 6 high)


The British Pound edged downward anew against the US Dollar, with prices back to re-test rising trend support established from early February (now at the 1.6808 figure). A daily close below this barrier initially targets the 38.2% Fibonacci retracement at 1.6711. Resistance comes in at 1.6920, the May 21 high, with a break above that opening the door for a challenge of the May 6 top at 1.6996.



Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, taking up the long side seems premature in the absence of a defined bullish reversal signal. We will remain on the sidelines for the time being.



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GBP/USD Technical Analysis – 4-Month Support Under Fire


Daily Chart – Created Using FXCM Marketscope 2.0



— Written by Ilya Spivak, Currency Strategist for DailyFX.com





GBP/USD Technical Analysis ? 4-Month Support Under Fire

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