GBP/USD Technical Analysis: Waiting for Short Trade Setup

By DailyFx | Updated August 05, 2014 AAA

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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.

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GBP/USD Technical Analysis: Waiting for Short Trade Setup

Daily Chart - Created Using FXCM Marketscope 2.0

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