GBP/USD Probing Below 1.6900 With Reversal Patterns Lacking

By DailyFx | July 31, 2014 AAA

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Talking Points

  • GBP/USD Technical Strategy: Shorts Preferred
  • Evening Star Offered Warning of Weakness Ahead
  • Void Of Bullish Signals Casts Doubt On A Recovery

GBP/USD’s woes have continued following an Evening Star formation on the daily near the pair’s 2014 highs at 1.7170. At this stage buyers appear prepared to support the Pound near the 1.6900 handle which could lead a small corrective bounce. However, an absence of bullish reversal signals casts doubt on the potential for a sustained recovery. A daily close below 1.6900 would open the 1.6830 mark.

GBP/USD: Absence Of Bullish Signals Casts Doubt On A Recovery

GBP/USD Probing Below 1.6900 With Reversal Patterns Lacking

Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

An examination of the four hour chart reveals a Bullish Engulfing pattern that yielded an intraday bounce for GBP/USD. However, with 1.6930 capping the pair’s advance it may be difficult for any strength to be sustained.

GBP/USD: Bulls Run Into Wall Following Reversal Formation

GBP/USD Probing Below 1.6900 With Reversal Patterns Lacking

4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

By David de Ferranti, Currency Analyst, DailyFX

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