DailyFX.com -

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

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.

You May Also Like

COMPANIES IN THIS ARTICLE
Related Forex Analysis
  1. Investing

    GBP/USD: August 2015 Forecast

  2. Forex News

    Heavy Event Risk in Jobs Data, Rate Decision Will Confront Summer Trading

  3. Forex News

    US Dollar as ‘Data Dependent’ as the Fed as NFPs Approach

  4. Forex News

    Monetary Policy Speculation Continues Next Week With NFPs, RBA and BoE

  5. Forex News

    GBP Opening Monthly Range Hinges on BoE Vote Count, Inflation Report

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!