Weekly closing price: 1.4495
Weekly opening price: 1.4503
Weekly view: The past week saw the GBP connect with the broken Quasimodo resistance line at 1.4633 for third time this year, which, as you can see, resulted in price selling off going into the week’s end. As long as the sellers remain in good shape from here, we see little structure stopping this pair from hitting demand carved from 1.4005-1.4219. If the sellers fail to defend 1.4633 on the other hand, keep an eyeball on the above at 1.4875 as this will likely be the next objective to reach.
Daily view: From the daily scale, this market shows room for price to continue trading lower this week down to demand seen at 1.4297-1.4393. This area has already managed to hold this pair higher from the last sell-off from the aforementioned weekly broken Quasimodo resistance, so this daily demand base will be a KEY zone to watch this week!
H4 view: Looking over to the H4 chart, Friday’s action saw Cable plummet following four consecutive days of buying. Support at 1.4570 was taken out during this assault, which saw price end the week closing around the 1.45 mark. With this market gapping eight pips higher this morning and is now seen to be trading below 1.45 we believe there’s a possible opportunity to sell.
Our suggestions: Should price close below and retest the 1.45 boundary today, a short trade could be up for grabs down to the 1. 44 handle, which is essentially the top-side of daily demand mentioned above at 1.4297-1.4393. Although both the weekly and daily timeframes suggest lower prices could be on the horizon right now (see above), do take into account that the H4 chart over on Silver (a highly correlating market to the Pound) is holding above support at 16.313. Therefore, we would only recommend taking a short from 1.45 if and only if lower timeframe confirmation is present. A break/retest of demand, a break/retest or simply a cluster of selling wicks around the 1.45 region would be sufficient enough for us. Stops are usually placed 5-10 pips beyond confirming structures.