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Talking Points:
- GBP/USD Technical Strategy: Flat
- Support: 1.6667-80 (Jan 24 high, 14.6% Fib ret.), 1.6593 (23.6% Fib ret.)
- Resistance: 1.6822 (Feb 17 high)
The British Pound may be forming a top against the US Dollar, with prices producing a bearish Evening Star candlestick pattern. Breaking below support in the 1.6667-80 area, marked by the January 24 high and the 14.6% Fibonacci retracement, exposes the 23.6% level at 1.6593. Near-term resistance is at 1.6822, the February 17 swing high.
Taking a short position with prices sitting squarely at relevant support is unattractive from a risk/reward perspective. A clear-cut bullish reversal is absent however, arguing against the long side. We will continue to stand on the sidelines and monitor prices for a palatable setup.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com