GBP/USD Technical Analysis: Waiting for Short Trade Setup

By DailyFx | August 05, 2014 AAA

DailyFX.com -

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

Talking Points:

  • GBP/USD Technical Strategy: Pending Short
  • Support: 1.6818-22, 1.6703, 1.6587
  • Resistance:1.6935, 1.6960, 1.7048

The British Pound moved lower against the US Dollar as expected after putting in a Hanging Man candlestick with negative RSI divergence. Prices are now attempting a recovery as we suspected after producing a bullish Piercing Line setup above support in the 1.6818-22 area, marked by the February 17 high and the 38.2% Fibonacci retracement. A daily close above trend line support-turned-resistance at 1.6935 targets the 23.6% level at 1.6960. Alternatively, a turn below 1.6818 opens the door for a test of the 50% Fib at 1.6703.

Last week’s break of rising trend support set from February hints the dominant trend bias favors the downside. As such, we will look for the upswing to produce a short entry opportunity and remain on the sidelines in the interim.

Add these technical levels directly to your charts with our Support/Resistance Wizard app!

GBP/USD Technical Analysis: Waiting for Short Trade Setup

Daily Chart - Created Using FXCM Marketscope 2.0

comments powered by Disqus
Related Forex Analysis
  1. Markets Brace for More Volatility on ECB TLTRO, Scotland Referendum
    Forex News

    Markets Brace for More Volatility on ECB TLTRO, Scotland Referendum

  2. USD/JPY unstoppable; 109.00 within reach
    Forex News

    USD/JPY unstoppable; 109.00 within reach

  3. British Pound: Scottish Vote is Close and FX Traders are Nervous
    Forex News

    British Pound: Scottish Vote is Close and FX Traders are Nervous

  4. EUR/USD on mend, but sky is still clouded
    Forex News

    EUR/USD on mend, but sky is still clouded

  5. Asia Recap: Focus shifted to Scottish vote
    Forex News

    Asia Recap: Focus shifted to Scottish vote

Trading Center