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Talking Points:
- GBP/USD Technical Strategy: Flat
- Support: 1.6469 (61.8% Fib ret., trend line), 1.6386 (76.4% Fib ret.)
- Resistance: 1.6536 (50% Fib ret.), 1.6604 (38.2% Fib ret.)
The British Pound appears to have found interim support after an expected reversal downward against the US Dollar. Prices are holding above 1.6469, a barrier marked by a rising trend line set from mid-November and the 61.8% Fibonacci retracement. A breach below this threshold on a daily closing basis exposes the 76.4% level at 1.6386. Alternatively, a reversal above resistance at 1.6536 – the 50% Fib – targets the 38.2% retracement at 1.6604.
Prices are too close to relevant support to justify a short position from a risk/reward perspective. On the other hand, entering a long trade looks premature absent a defined bullish reversal signal. We will continue to stand aside for now, waiting for a more attractive setup to present itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com