DailyFX.com -

To receive Ilya's analysis directly via email, please SIGN UP HERE

Talking Points:

  • GBP/USD Technical Strategy: Flat
  • Support:1.6996, 1.6960, 1.6897
  • Resistance:1.7102, 1.7228, 1.7355

The British Pound pushed to the highest level in nearly five years against the US Dollar, overcoming the 1.70 figure. Near-term resistance is now at 1.7102, the 76.4% Fibonacci expansion, with a break above that on a daily closing basis exposing the 100% level at 1.7228. Alternatively, a reversal below support in the 1.6996-1.7023 area – marked by the 61.8% Fib and the May 6 high – targets the 50% level at 1.6960.

Entering long is a tempting proposition but we will tactically opt to stand aside. The correlation between GBPUSD and the UK-US 2-year bond yield spread is 0.88 (20-day percent change studies), putting monetary policy bets in the driver’s seat. The week ahead is thin on UK news-flow needed to drive further Pound gains while the US docket offers plenty of opportunities for markets to rethink the post-FOMC reaction. With that in mind, we remain flat.

Confirm your chart-based trade setups with the Technical Analyzer. New to FX? Start Here!

GBP/USD Technical Analysis – Buyers Expose 1.71 Figure

Daily Chart - Created Using FXCM Marketscope 2.0

Related Articles
  1. Forex Education

    Four Currencies Under the Spotlight in 2016

    With currencies having become the “tail that wags the dog,” in terms of their impact on the global economy, these four currencies will be under the spotlight in 2016.
  2. Forex Fundamentals

    These Currencies Are The Biggest Losers Of The Stock Downturn

    Here’s a list of the hardest-hit currencies amid the global stock market mayhem.
  3. Forex Strategies

    Will the Euro Continue to Rally? (EUO)

    The euro is rallying. Should investors chase this performance or is the real opportunity on the other side of the trade?
  4. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  5. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  6. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  7. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  8. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  9. Investing

    Financial News Comparison: Bloomberg Vs. Reuters (BAC, GOOG)

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  10. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
COMPANIES IN THIS ARTICLE
Trading Center