BLBG: JPMorgan Ends Sterling Short as High Broken: Technical Analysis
July 27 (Bloomberg) -- JPMorgan Chase & Co. halted a short position on the pound after Britain’s currency broke above April’s high.
“While the near-term setup argues for some pause, today’s upside break suggests an increased risk for additional upside,” Niall O’Connor, a technical analyst in New York at the second- largest U.S. bank by assets, wrote in a research note today.
The pound rallied 0.5 percent to $1.5569 after earlier advancing as much as 0.6 percent to $1.5578, the highest level since Feb. 18. Sterling traded above the 200-day moving average for the first time since Jan. 28, according to Bloomberg data. The pound broke the April high of $1.5526, according to JPMorgan.
The pound may dip to support of $1.5385 before advancing to a range of $1.5750 and $1.5865, O’Connor wrote.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. A support level is an area on a chart where orders to buy a currency versus a counterpart may be placed, potentially blocking a decline. A short position is a bet a security will drop.
