- GBP/USD Technical Strategy: Sidelines Preferred
- Daily close above 1.7000 needed to suggest conviction amongst bulls
- Absence of bearish reversal pattern indicates potential for gains
GBP/USD may be primed to run on its August 2009 high if the pair can close above the critical 1.7000 handle on the daily. While a Doji formation signaled some signs of hesitation from traders, there’s an absence of bearish reversal patterns which further suggests the potential for a push higher.
GBP/USD: Doji Offers Sign of Hesitation By The Bulls
Daily Chart - Created Using FXCM Marketscope 2.0
Drilling down to the four hour chart, the deliberation amongst traders shy of the 1.7000 mark is made further evident by several short body candles. While a Hanging Manformation offered a signal of a potential pullback, it failed to find confirmation from an ensuing down-period. This leaves bearish reversal patterns absent at this stage, which precludes a correction.
GBP/USD: Hanging Man Fails To Find Confirmation
4 Hour Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market 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.