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Talking Points:
- GBP/USD Technical Strategy: Pending Short
- Support: 1.6611, 1.6533, 1.6470
- Resistance:1.6659, 1.6720-37, 1.6800
The British Pound renewed its push downward against the US Dollar, sinking to the lowest level in four months. A daily close below the 23.6% Fibonacci expansion at 1.6611 exposes the 38.2% level at 1.6533. Alternatively, a reversal above the 14.6% Fib at 1.6659 opens the door for a test of the 1.6720-37 area, marked by a falling trend line and the August 18 high.
Risk/reward considerations argue against entering short with prices sitting squarely at support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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