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The British Pound may be readying to turn lower anew against the US Dollar after prices produced a Bearish Engulfing candlestick pattern. A break below initial support at 1.6598, the 23.6% Fibonacci expansion, exposes the 38.2% level at 1.6545. Near-term resistance is at 1.6683, the March 31 high, with a reversal above that eyeing the February 14 close at 1.6742.
Risk/reward considerations argue against entering short while prices trade so close to relevant support. On the other hand, a long position lacks an actionable upward reversal signal to suggest that resistance will hold. As such, we will remain flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com