Well done to those who shorted 1.30/1.2991...
GBP/USD:
Monthly timeframe:
Brought forward from previous analysis:
Early February 2018 saw the pair reject 1.4520/1.3893, a 50.0% retracement and 38.2% Fibonacci retracement combination (red).
In recent months, though, the market witnessed longer-term flows retest the underside of a resistance area at 1.3699/1.3503. continued selling is a possibility on this timeframe, targeting a support area at 1.1899/1.2217.
Daily timeframe:
In conjunction with the monthly timeframe, we can see price action on the daily timeframe chalked up a bearish pennant pattern and had its lower edge engulfed last week.
As of current price, we are retesting the recently broken pennant edge, which if it holds, could guide the pair to as far south as a support area coming in at 1.2816/1.2719, followed by the 200-day SMA (1.2687).
Note we also have a resistance zone supporting the upper edge of the pennant formation at 1.3269/1.3165, as well as a trendline resistance (1.3514) in the mix.
H4 timeframe:
Leaving the 127.2% Fibonacci extension at 1.2867 unchallenged, GBP/USD dipped a toe in waters within a resistance zone at 1.2993/1.2958 in recent sessions. With highs of 1.2991 reached yesterday, there’s a possibility the market may breach the current resistance zone to draw in sellers from the 38.2% Fibonacci retracement ratio at 1.3001. Note this level also coincides closely with a trend line support-turned resistance level (1.2954).
H1 timeframe:
GBP/USD retested the underside of a noted zone of resistance Wednesday between the key figure 1.30, a 61.8% Fibonacci retracement ratio at 1.2994 and a 161.8% Fibonacci extension at 1.2991 (marked in red). Price now hovers a few points north of a support area at 1.2940/1.2949, reinforced by a 50-period SMA (1.2945) and nearby 100-period SMA (1.2933). Traders may also note the RSI recently crossed beneath its 50.0 value, indicating a bearish tone on this timeframe.
Beyond the said SMAs we have the 1.29 handle to look forward to, a level that offered healthy support and held price higher Tuesday.
Direction:
The monthly, daily and H4 timeframes all exhibit potential to the downside, therefore a break of the current H1 support area could be in the offing today. A break lower will likely see sellers from the 1.30/1.2991 H1 resistance reduce risk to breakeven, with the expectation of a run materialising to 1.29.
Monthly timeframe:
Brought forward from previous analysis:
Early February 2018 saw the pair reject 1.4520/1.3893, a 50.0% retracement and 38.2% Fibonacci retracement combination (red).
In recent months, though, the market witnessed longer-term flows retest the underside of a resistance area at 1.3699/1.3503. continued selling is a possibility on this timeframe, targeting a support area at 1.1899/1.2217.
Daily timeframe:
In conjunction with the monthly timeframe, we can see price action on the daily timeframe chalked up a bearish pennant pattern and had its lower edge engulfed last week.
As of current price, we are retesting the recently broken pennant edge, which if it holds, could guide the pair to as far south as a support area coming in at 1.2816/1.2719, followed by the 200-day SMA (1.2687).
Note we also have a resistance zone supporting the upper edge of the pennant formation at 1.3269/1.3165, as well as a trendline resistance (1.3514) in the mix.
H4 timeframe:
Leaving the 127.2% Fibonacci extension at 1.2867 unchallenged, GBP/USD dipped a toe in waters within a resistance zone at 1.2993/1.2958 in recent sessions. With highs of 1.2991 reached yesterday, there’s a possibility the market may breach the current resistance zone to draw in sellers from the 38.2% Fibonacci retracement ratio at 1.3001. Note this level also coincides closely with a trend line support-turned resistance level (1.2954).
H1 timeframe:
GBP/USD retested the underside of a noted zone of resistance Wednesday between the key figure 1.30, a 61.8% Fibonacci retracement ratio at 1.2994 and a 161.8% Fibonacci extension at 1.2991 (marked in red). Price now hovers a few points north of a support area at 1.2940/1.2949, reinforced by a 50-period SMA (1.2945) and nearby 100-period SMA (1.2933). Traders may also note the RSI recently crossed beneath its 50.0 value, indicating a bearish tone on this timeframe.
Beyond the said SMAs we have the 1.29 handle to look forward to, a level that offered healthy support and held price higher Tuesday.
Direction:
The monthly, daily and H4 timeframes all exhibit potential to the downside, therefore a break of the current H1 support area could be in the offing today. A break lower will likely see sellers from the 1.30/1.2991 H1 resistance reduce risk to breakeven, with the expectation of a run materialising to 1.29.