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Talking Points:
- GBP/USD Technical Strategy: Short at 1.6233
- Support: 1.5954, 1.5819, 1.5653
- Resistance: 1.6088, 1.6255, 1.6486
The British Pound may have established a near-term low against the US Dollar after putting in a bullish Piercing Line candlestick pattern. A daily close above the 1.6088-1.6103 area marked by the 38.2%Fibonacci expansion and the September 8 low exposes the intersection of the 23.6% expansion and a falling trend line set from mid-July at 1.6255. Alternatively, a reversal below the 50% Fib at 1.5954 opens the door for a test of the 61.8% expansion at 1.5819.
We entered short GBPUSD at 1.6233and have since taken profit on half of our exposure. The rest remains open to capture any further downside momentum with a stop-loss the breakeven level (1.6233).
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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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