The range between 1.6600 and 1.6765/70 for the Pound remains in force. While a test of the range-top looked possible yesterday, sellers at the 50% Fib Retracement level at 1.6690 acted to cap the GBP/USD’s advance. This has resulted in a Bearish Engulfing candlestick pattern that is threatening a break of the range-bottom at 1.6600.
GBP/USD Range Remains Intact
4 Hour Chart - Created Using FXCM Marketscope 2.0
A break below 1.6600 may open up the 50% Fib Retracement level on the daily at 1.6536.
GBP/USD Signs of Indecision on Daily
Daily Chart - Created Using FXCM Marketscope 2.0
The ominous Dark Cloud Cover formation on the weekly at multi-year resistance also remains on the radar, and may be warning of a more significant correction ahead for the Pound.
GBP/USD Weekly Warns of Declines
Weekly Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
Follow David on Twitter: @Davidde
To receive David’s analysis directly via email, please sign up here.