GBP/USD:
Following UK PM May's concessions, which the market viewed as an indication a no-deal Brexit has diminished, cable set a fresh YTD high at 1.3350 Wednesday, firmly breaking through the 1.33 handle on the H4 timeframe. The next target on this scale has 1.34 eyed, which if 1.33 holds as support may be achieved today, according to the H4 trend and nearby structure. It might also be worth noting the H4 RSI indicator is seen testing deep overbought terrain.
Up 1.93% so far this week, the current weekly candle is seen invading supply territory pictured at 1.3472-1.3204, which happens to be positioned just south of the 2018 yearly opening level at 1.3503. In parallel with this, daily flow is crossing swords with a Quasimodo resistance level parked at 1.3315. Adding weight to a potential correction from here is the approach: an ABCD bearish formation (black arrows).
Areas of consideration:
Although sterling is trading with a reasonably strong upside bias on the H4 timeframe, with room seen to appreciate towards 1.34, traders are urged to tread carefully. As highlighted above, hefty higher-timeframe resistances are in motion.
For that reason, should we drop back beneath 1.33 and retest the underside of the number as resistance, a sell could be in store, targeting nearby H4 support at 1.3248 as the initial take-profit zone, followed closely by the 1.32 handle.
Today’s data points: FOMC Member Clarida Speaks; US Advance GDP q/q; US Advance GDP Price Index q/q; Chicago PMI.
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