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Talking Points:

• GBP/USD Technical Strategy: Short at 1.4926

• Support: 1.4696, 1.4431, 1.4167

• Resistance: 1.4830, 1.5023, 1.5224

The British Pound is digesting losses having turned lower against the US Dollar as expected following the appearance of a Bearish Engulfing candlestick pattern. A daily close below the 38.2% Fibonacci expansionat 1.4696 exposes the 50% level at 1.4431. Alternatively, a reversal above support-turned-resistance at 1.4830 – a double bottom carved out between March and July 2013 – clears the way for a test of the 1.4950-1.5023 area (January 23 low, 23.6% Fib).

We entered short GBPUSD at 1.4926, initially targeting 1.4696. A stop-loss will be triggered on a daily close above 1.5136. We will book gains on half of the trade and move the stop-loss to the breakeven level when the first target is reached.

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Daily Chart - Created Using FXCM Marketscope

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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