British Pound Gains on Dollar Are Likely Short-lived: Technical Analysis
Pound Gains on Dollar Likely Short-lived
Chris Ratcliffe/Bloomberg
The pound fell 0.3 percent against the greenback to $1.5622 at 9:47 a.m. in New York.
The pound fell 0.3 percent against the greenback to $1.5622 at 9:47 a.m. in New York. Photographer: Chris Ratcliffe/Bloomberg
Any rallies in the British pound against the U.S. dollar this week will probably be erased, according to Barclays Plc, citing technical research.
“A bearish weekly engulfing candle implies any gains this week are likely to be temporary,” strategists including Jordan Kotick in New York and Philip Roberts in London at the bank’s Barclays Capital unit wrote in a research note today. The British currency could rise as high as $1.6010 this week before retrenching, the strategists wrote.
A so-called weekly bearish engulfing pattern appears on a candle-stick chart when, at the end of an uptrend, the range between the week’s opening and closing price is greater than the previous week’s range. The candle chart displays a currency’s high, low, open and close for each day. The range between the open and close is known as the body.
The pound fell 0.3 percent against the greenback to $1.5622 at 9:47 a.m. in New York. Sterling tumbled 2.2 percent last week after trading near the highest level since February.
Barclays will look to sell the pound if it rises near $1.5825, according to the note.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
To contact the reporter on this story: Alex Kowalski in New York at akowalski13@bloomberg.net
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