Tuesday, December 30, 2014

GBP/USD Technical Analysis: Candle Setup Hints at Gains




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Talking Points:



  • GBP/USD Technical Strategy: Flat


  • Support: 1.5493, 1.5409, 1.5293


  • Resistance: 1.5636, 1.5730, 1.5881


The British Pound may be preparing to turn higher against the US Dollar after prices put in a Bullish Engulfing candlestick pattern. Near-term resistance is at 1.5636, the 14.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the intersection of channel top resistance and the 23.6% level at 1.5730. Alternatively, a reversal below channel floor support at 1.5493 opens the door for a challenge of the 38.2% Fib retracement at 1.5409.



While entering long is tempting from a purely technical perspective, we will tactically opt to stand aside. Thin pre-holiday liquidity conditions hint follow-through on current price action may prove lackluster and we will wait for the onset of 2015 before committing to a directional bias.



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GBP/USD Technical Analysis: Candle Setup Hints at Gains


Daily Chart – Created Using FXCM Marketscope



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





GBP/USD Technical Analysis: Candle Setup Hints at Gains

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