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- GBP/USD Technical Strategy: Pending Short
- Support: 1.6818-22, 1.6703, 1.6587
- Resistance:1.6888, 1.6944-60, 1.7048
The British Pound moved lower against the US Dollar as expected after putting in a Hanging Man candlestick with negative RSI divergence. A corrective bounce may now be in the cards after the pair carved out a bullish Piercing Line formation above support in the 1.6818-22 area, marked by the February 17 high and the 38.2% Fibonacci retracement. A daily close above 1.6888, the August 5 high, targets the 1.6944-60 region bracketed by trend line support-turned-resistance and the 23.6% level. Alternatively, a reversal below 1.6818 clears the way for a challenge of the 50% Fib at 1.6703.
Last week’s break of trend support hints the dominant trend bias favors the downside. As such, we will consider any on-coming upswing as an opportunity to enter short, waiting on the sidelines in the interim.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com