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- GBP/USD Technical Strategy: Flat
- Support: 1.6419 (channel bottom), 1.6356 (38.2% Fib ret.)
- Resistance: 1.6475 (23.6% Fib ret.), 1.6667 (Jan 24 high)
Prices declined as expected after putting in a Bearish Engulfing candlestick pattern. The pair is now testing support at a rising channel bottom set from set from mid-December, with a break lower on a daily closing basis initially exposing 1.6356. Confirmation remains elusive for the time being however.
Entering short with prices squarely at support is likewise unattractive from a risk/reward perspective. On the other hand, attempting to pick a bottom and trading the pair to the long side would assume support will hold. Without a tangible to make such a leap of faith apparent on the chart, we will stand aside.
Confirm your chart-based trade setups with the Technical Analyzer.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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