By Greg Holden – The British pound’s recent gains against the US dollar were short-lived yesterday as the pair found strong resistance at 1.5820.
The Fibonacci retracement lines drawn on our daily chart suggest that this price level is actually a significant statistical barrier for the pair as the 61.8% line.
We can see on the chart below that traders took profit at the 1.5820 level as the pair touched this Fibonacci line.
Our Stochastic (slow) on the daily chart below also supports the notion that downward pressure is mounting.
Traders may want to take advantage of these long-term fluctuations by entering short positions to capture the retracement back towards the 50% line at 1.5533.
The fundamental side appears to support this downward notion as well.
A Fitch downgrade of Ireland has put financial strain on the euro zone and UK, helping the US dollar gain ground against its Atlantic rivals.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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