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Talking Points:
- GBP/USD Technical Strategy: Short at 1.6233
- Support: 1.5954, 1.5819, 1.5653
- Resistance: 1.6088, 1.6255, 1.6486
The British Pound accelerated downward against the US Dollar, tumbling to the weakest level in 11 months. A daily close below the 50% Fibonacci expansion at 1.5954 exposes the 61.8% level at 1.5819. Alternatively, a reversal back above the 38.2% Fib at 1.6088 opens the door for a test of the 1.6255, the intersection of the 23.6% expansion and a falling trend line set from mid-July.
We entered short GBPUSD at 1.6233, initially targeting 1.6088. A stop-loss is set to trigger on a daily close above 1.6388. We will take profit on half of the position and move the stop-loss to breakeven once the first objective is met.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com