Is the Cable Trying to Recover from Near 1.5580?

GBP/USD (1.5720)

• Resistance Levels: 1.5730, 1.5810, 1.5950
• Support Levels, 1.5665, 1.5575, 1.5490

The GBP/USD is trying to bounce higher. We are bouncing off a minor support near 1.5580 where it was trading at a 14 month low. Please see the above daily MT 4 chart. We need a daily close above the technical level at 1.5730 in order to test 1.5810. Should we start pushing back lower, then a break below 1.5665 will challenge the support at 1.5575. Looking at the daily chart, note the head and shoulder pattern just below 1.6188. I am thinking this area should cap any gains leading to another correction lower.

Now, let’s look at the below 4 hour MT 4 chart and discuss trading strategy. We are trading too close to a resistance level to make a long trade for now. There are also no bearish reversal signs. This means, entering a short trade is not practical yet.  With the absence of a clear trading signal, I am opting to sit on the sidelines for now.

Remember, trading strategies are for educational purposes only and do not constitute trading advice. Always do your own analysis.