Potential shorting opp at completion of AB=CD formation (1.3057)
A spineless greenback helped GBP bulls find their feet early on in yesterday’s London morning segment. The advance, shaped by a number of strong consecutive H4 bull candles, ran through multiple tech resistances and ended the day kissing the underside of a supply penciled in at 1.3053-1.3037. Despite this, we may see this area faked before sellers step into the fray, since there is a potential AB=CD formation (see black arrows) seen just above at 1.3057.
Looking over to the bigger picture, weekly price remains teasing the underside of a supply base coming in at 1.3120-1.2957. Should the USDX weekly support at 11854 hold ground, this could bolster weekly sellers from the current supply zone and eventually send the unit back down to demand penciled in at 1.2589-1.2759. In conjunction with the weekly timeframe, daily price recently drove high into the walls of a resistance area at 1.3058-1.2979. Given its strong history dating back to mid-May, we feel this zone will likely provide resistance and ultimately push cable down to the support area seen below at 1.2818-1.2752 that converges with a channel support line taken from the low 1.2365.
Suggestions: A short from the H4 AB=CD completion point at 1.3057, with stops planted above its 161.8% Fib ext. level at 1.3083, could be an option today. First take-profit target, for us, would be the 1.30 region.
Data points to consider: US ISM non-manufacturing PMI at 3pm GMT+1.
Looking over to the bigger picture, weekly price remains teasing the underside of a supply base coming in at 1.3120-1.2957. Should the USDX weekly support at 11854 hold ground, this could bolster weekly sellers from the current supply zone and eventually send the unit back down to demand penciled in at 1.2589-1.2759. In conjunction with the weekly timeframe, daily price recently drove high into the walls of a resistance area at 1.3058-1.2979. Given its strong history dating back to mid-May, we feel this zone will likely provide resistance and ultimately push cable down to the support area seen below at 1.2818-1.2752 that converges with a channel support line taken from the low 1.2365.
Suggestions: A short from the H4 AB=CD completion point at 1.3057, with stops planted above its 161.8% Fib ext. level at 1.3083, could be an option today. First take-profit target, for us, would be the 1.30 region.
Data points to consider: US ISM non-manufacturing PMI at 3pm GMT+1.
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