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Talking Points:
- GBP/USD Technical Strategy: Short at 1.6233
- Support: 1.6124, 1.5954, 1.5819
- Resistance: 1.6237, 1.6459, 1.6566
The British Pound advanced against the US Dollar as expected after producing a bullish Piercing Line candlestick pattern. Near-term resistance is at 1.6237, the intersection of a falling trend line and the 23.6%Fibonacci retracement, with a break above that on a daily closing basis exposing 1.6419-59 area marked by the March 24 low and the 38.2% level. Alternatively, a reversal below the 14.6% Fib at 1.6124 clears the way for a challenge of the 50% Fib expansion at 1.5954.
We sold GBPUSD at 1.6233 and have since taken profit on half of our exposure. The remainder of the trade is open to capture any further downside momentum. The stop-loss is now at the breakeven level (1.6233).
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com