Talking Points:
- GBP/USD Technical Strategy: Short at 1.6233
- Support: 1.5876, 1.5720, 1.5565
- Resistance: 1.6066, 1.6184, 1.6377
The British Pound may be setting up for a move higher against the US Dollar after producing a bullish Piercing Line candlestick pattern. The outlines of a falling wedge chart formation reinforce the case for an upside scenario. A daily close above the 14.6% Fibonacci retracement at 1.6066 exposes the 1.6155-84 area marked by the wedge top and the 23.6% level. Alternatively, a turn below the 1.5876 – the intersection of the 14.6% Fib expansion and the wedge floor – opens the door for a test of the 1.5720-57 zone (June 2013 floor, 23.6% Fib expansion).
We entered short GBP/USD at 1.6233and have since taken profit on half of our exposure. The rest remains open to capture any further downside momentum in the event the wedge setup fizzles, with a stop-loss at the breakeven level (1.6233).
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