GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Early February 2018 saw the pair reject 1.4520/1.3893, a 50.0% retracement and 38.2% Fibonacci retracement combination (red). This, along with trendline resistance (2.1161), remains a well-rounded resistance area to keep an eye on long term.
In recent months, we’ve seen a recovery form off 1.1904/1.2235, clocking highs of 1.3514 in December 2019 and breaking the 1.3380 March 2019 high.
Currently, the pair trades at -1.99% on the month.
Daily timeframe:
Partially altered outlook from previous analysis –
Demand at 1.2823/1.2910, represents the lower edge of a multi-month range (supply at 1.3303/1.3184 caps upside), continues to contain downside.
Local trendline resistance (1.3514) could make an appearance this week, as could the supply zone mentioned above at 1.3303/1.3184. Beyond the current demand, another port of demand, a touch larger than the current, resides at 1.2649/1.2799, which happens to house the 200-day SMA (1.2688).
In terms of the RSI indicator, since the beginning of the year we have been compressing within a descending channel (black lines), with the value currently holding above channel support.
H4 timeframe:
Partially altered outlook from previous analysis –
After retesting demand 1.2868/1.2894 and holding firm, the pair likely has eyes for supply drawn from 1.3023/1.3006. What’s also appealing here from a technical perspective is a potential AB=CD approach (orange) that terminates around 1.3013. A dip lower, nevertheless, could place demand at 1.2806/1.2833 back in focus.
It may also interest some traders to note that we likely have sellers attempting to fade the recent pullback from 1.2849, due to the 1.3070 double top formation recently confirming (breaking the 1.2872 low, the trough between the two peaks, marked with a blue arrow, offers double-top confirmation). The take-profit target (1.2672) for confirmed double-top patterns can be calculated by taking the distance between the highest peak and the trough and projecting this value south of the trough.
H1 timeframe:
Monday found refuge off 1.29 in early London, eventually cracking through the 50-period SMA. Demand-turned supply at 1.2965/1.2987 is in sight once again, stationed a touch south of the key figure 1.30. The RSI indicator also recently breached 50.0 to the upside, generally considered a bullish signal.
Direction:
Below is unchanged from previous analysis.
Longer term on the daily timeframe the unit exhibits scope to explore higher ground this week, aiming for a retest at trendline resistance (1.3514). However, the fact the February 11th rebound failed to post fresh highs indicates possible weakness out of the current demand.
The key figure 1.30 is likely watched by many traders as possible resistance, even more so when price-action based traders take into account we also have supply on the H4 drawn from 1.3023/1.3006 encapsulating any whipsaw that may occur above 1.30 this week.
Buy-stop liquidity above 1.30 will likely provide enough fuel for larger sellers to fade the H4 supply area at 1.3023/1.3006, with the possibility of a sizable selloff emerging, based on the recent (H4) double-top’s take profit target suggesting moves to as low as 1.2672, seen deep within daily demand at 1.2649/1.2799.
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Early February 2018 saw the pair reject 1.4520/1.3893, a 50.0% retracement and 38.2% Fibonacci retracement combination (red). This, along with trendline resistance (2.1161), remains a well-rounded resistance area to keep an eye on long term.
In recent months, we’ve seen a recovery form off 1.1904/1.2235, clocking highs of 1.3514 in December 2019 and breaking the 1.3380 March 2019 high.
Currently, the pair trades at -1.99% on the month.
Daily timeframe:
Partially altered outlook from previous analysis –
Demand at 1.2823/1.2910, represents the lower edge of a multi-month range (supply at 1.3303/1.3184 caps upside), continues to contain downside.
Local trendline resistance (1.3514) could make an appearance this week, as could the supply zone mentioned above at 1.3303/1.3184. Beyond the current demand, another port of demand, a touch larger than the current, resides at 1.2649/1.2799, which happens to house the 200-day SMA (1.2688).
In terms of the RSI indicator, since the beginning of the year we have been compressing within a descending channel (black lines), with the value currently holding above channel support.
H4 timeframe:
Partially altered outlook from previous analysis –
After retesting demand 1.2868/1.2894 and holding firm, the pair likely has eyes for supply drawn from 1.3023/1.3006. What’s also appealing here from a technical perspective is a potential AB=CD approach (orange) that terminates around 1.3013. A dip lower, nevertheless, could place demand at 1.2806/1.2833 back in focus.
It may also interest some traders to note that we likely have sellers attempting to fade the recent pullback from 1.2849, due to the 1.3070 double top formation recently confirming (breaking the 1.2872 low, the trough between the two peaks, marked with a blue arrow, offers double-top confirmation). The take-profit target (1.2672) for confirmed double-top patterns can be calculated by taking the distance between the highest peak and the trough and projecting this value south of the trough.
H1 timeframe:
Monday found refuge off 1.29 in early London, eventually cracking through the 50-period SMA. Demand-turned supply at 1.2965/1.2987 is in sight once again, stationed a touch south of the key figure 1.30. The RSI indicator also recently breached 50.0 to the upside, generally considered a bullish signal.
Direction:
Below is unchanged from previous analysis.
Longer term on the daily timeframe the unit exhibits scope to explore higher ground this week, aiming for a retest at trendline resistance (1.3514). However, the fact the February 11th rebound failed to post fresh highs indicates possible weakness out of the current demand.
The key figure 1.30 is likely watched by many traders as possible resistance, even more so when price-action based traders take into account we also have supply on the H4 drawn from 1.3023/1.3006 encapsulating any whipsaw that may occur above 1.30 this week.
Buy-stop liquidity above 1.30 will likely provide enough fuel for larger sellers to fade the H4 supply area at 1.3023/1.3006, with the possibility of a sizable selloff emerging, based on the recent (H4) double-top’s take profit target suggesting moves to as low as 1.2672, seen deep within daily demand at 1.2649/1.2799.