Daily view: Following the retest of the recently broken daily Quasimodo area at 1.5478-1.5435, price has continued to weaken. Providing that the sellers remain strong here, we see very little reason why price will not cross swords with the daily seen just below at 1.5088-1.5216 (surrounds the weekly buy level 1.5144).
4hr view: Throughout the course of yesterday’s sessions, the GBP/USD aggressively sold off from 1.5358. This move, as you can see took out the 1.5300 level and attacked a small, yet clearly resilient 4hr demand area coming in at 1.5240-1.5274.
Although this 4hr is holding the firm at the moment, we believe this will be a short-lived rally for the following reasons:
1. Both the weekly and daily timeframes show there is still room to move south until we hit demand (see above).
2. There is a 4hr Bat completion area seen in green just below at 1.5224-1.5164 (located around the upper limits of the aforementioned daily demand area) that is just begging to see some action. This zone not only lines up with the round number 1.5200, but also converges just beautifully with 4hr demand seen marked with a red arrow at 1.5162-1.5191.
3. And finally, take a note of the symmetry we’ve seen on this pair recently – a clear approach appears to be forming (the first two drives are seen marked with pink arrows at 1.5436/1.5384).
All we need to see now is a sell off similar to the first and second drives (completing the pattern), and price will likely tag the upper limit of our 4hr reversal zone, where at which point our team will enter long with a relatively heavy position at 1.5228.
Levels to watch/ live orders:
• Buys: 1.5228 (Predicative stop-loss orders seen at: 1.5140).
• Sells: Flat (Predicative stop-loss orders seen at: N/A).
In addition to this, our team will soon be releasing a video explaining the Quasimodo pattern in detail.