GBP/USD Technical Analysis: Waiting to Short on Upswing

By DailyFx | Updated August 11, 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: 1.6743, 1.6699, 1.6654
  • Resistance:1.6798, 1.6833, 1.6888

The British Pound moved lower against the US Dollar as expected after putting in a Hanging Man candlestick with negative RSI divergence. Near-term support is at 1.6743, 38.2% Fibonacci expansion. A daily close below that initially exposes the 50% level at 1.6699. Positive RSI divergence warns of ebbing bearish momentum and hints at an on-coming recovery however. A reversal above the 23.6% Fib at 1.6798 clears the way for a challenge of the 14.6% expansion at 1.6833.

We are opting to stand aside. Long-term charts reveal sellers face a 5-year support line at 1.6745. This coupled with RSI divergence and our fundamental outlook argues against chasing prices lower. We will remain flat, waiting for a bounce to yield a short entry setup.

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

GBP/USD Technical Analysis: Waiting to Short on Upswing

Daily Chart - Created Using FXCM Marketscope 2.0

You May Also Like

COMPANIES IN THIS ARTICLE
Related Forex Analysis
  1. Forex News

    GBP/USD Could Bounce Here

  2. Forex News

    US Dollar Poised for Further Gains, but Watch Nonfarm Payrolls

  3. Forex News

    British Pound Likely to Lose Further versus US Dollar

  4. Forex News

    British Pound Forecast to Gain versus Yen

  5. Forex News

    GBP/USD recovers from the dip, trades at 50-DMA

Trading Center