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Talking Points:
- GBP/USD Technical Strategy: Flat
- Support: 1.5873. 1.5680, 1.5525
- Resistance: 1.6184, 1.6377, 1.6532
The British Pound is struggling to make good on a bottoming chart setup marked by the formation of a bullish Piercing Line candlestick pattern. Near-term resistance is now at 1.6184, the 23.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the 38.2% level at 1.6377. Alternatively, a reversal below the 1.5873-93 area (October 2013 low, 23.6% expansion) opens the door for a test of the 1.5680-5720 zone (38.2% expansion, June 2013 bottom).
A bullish Head and Shoulders bottom chart formation may be in the works but confirmation is needed on a daily close above 1.6184 (the would-be pattern’s neckline) to make for an actionable setup. As such, we will continue to stand aside for the time being.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com