To receive Ilya's analysis directly via email, please SIGN UP HERE
The British Pound recoiled downward against the US Dollar, failing to overcome the 1.70 figure. Near-term support is at 1.6820, the 23.6% Fibonacci retracement. A break downward on a daily closing basis exposes the 1.6711-27 area, marked by the 38.2% level and a rising trend line set from early February. Trend line support-turned-resistance is at 1.6922, with a rebound above that targeting the May 6 high at 1.6996.
Risk/reward considerations argue against entering short with prices sitting squarely at relevant support. On the other hand, taking up the long side looks premature without a defined bullish reversal signal. We will remain flat for now, waiting for an actionable opportunity to emerge.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com