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- GBP/USD Technical Strategy: Flat
- Support: 1.6320, 1.6217, 1.6051
- Resistance:1.6395, 1.6486, 1.6621
The British Pound rebounded against the US Dollar as expected, with prices threatening to overturn the down trend set from mid-July. Near-term falling trend line resistance is at 1.6395, with a break above that on a daily closing basis exposing the 1.6459-86 area marked by the March 24 low and the 38.2% Fibonacci retracement. Alternatively, a reversal below 23.6% level at 1.6320 clears the way for a challenge of the 14.6% Fib at 1.6217.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. With that in mind we will remain flat for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com