GBP/USD Reclaims Lost Ground On The Back Of A Piercing Line Pattern

By DailyFx | August 29, 2014 AAA

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Talking Points

  • GBP/USD Technical Strategy: Sidelines Preferred
  • Piercing Line Pattern May Find Limited Follow-Though
  • Climb Over 1.6660 Needed To Suggest A Small Base

GBP/USD continues its cautious recovery which follows the appearance of a Piercing Line formation near the 1.6526 floor. Yet the bullish reversal pattern may struggle to yield a sustained recovery against the backdrop of a core downtrend. This leaves selling into rallies preferred at this point. A daily close above 1.6660 would be required to warn of a small base and the potential for a sustained recovery.

GBP/USD: Piercing Line Pattern May See Limited Follow-Through

GBP/USD Reclaims Lost Ground On The Back Of A Piercing Line Pattern

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

The four hour chart leaves few directional signals for GBP/USD. A narrow range appears to have formed with short body candles indicating indecision amongst traders. Based on the bearish backdrop from the daily selling into corrective bounces would be preferred.

GBP/USD: Short Body Candles Suggest Conviction Lacking

GBP/USD Reclaims Lost Ground On The Back Of A Piercing Line Pattern

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

By David de Ferranti, Currency Analyst, DailyFX

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