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- GBP/USD Technical Strategy: Short at 1.6710
- Support: 1.6593 (23.6% Fib ret.), 1.6452 (38.2% Fib ret.)
- Resistance: 1.6742 (Feb 14 close), 1.6800 (38.2% Fib exp.)
We entered short GBP/USD yesterday looking for prices to decline after they produced a Bearish Engulfing candlestick pattern below resistance at 1.6742, the February 14 close. Our initial objective is 1.6593, the 23.6% Fibonacci retracement. A break below this level on a daily closing basis exposes the 38.2% retracement at 1.6452. Alternatively, a reversal above 1.6742 exposes the 38.2% Fib expansion at 1.6800. The setup is little-changed from the time we initiated the position and we will continue to hold it for the time being. A stop-loss is to be activated on a daily close above 1.6822, the February 17 high.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com