- GBP/USD Technical Strategy: Sidelines Preferred
- Evening Star candlestick pattern forms following pullback
- Bearish formations absent in intraday trade
GBP/USD’s pullback from its recent highs near 1.7170 has yielded an Evening Star formation which may warn of a further correction for the pair. A break below support at 1.7040 would be required to cement a bearish technical bias and set the stage for a decline to 1.6900.
GBP/USD: Evening Star Offers Ominous Warning Near Recent Highs
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
Drilling down to the four hour chart; a Piercing Line pattern near 1.7038 helped deliver an intraday bounce for GBP/USD. However with 1.7100 looming nearby and a Bearish Engulfing pattern forming on the daily, the potential for further gains over the session ahead may be limited.
GBP/USD: Piercing Line Delivers Intraday Bounce
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
Follow David on Twitter: @Davidde
To receive David’s analysis directly via email, please sign up here.
Learn how to read candlesticks to help identify trading opportunities with the DailyFX Candlesticks Video Course.