Potential long seen on the GBP this week, what do you think?

FX:GBPUSD   British Pound / U.S. Dollar
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Weekly Timeframe: Last week saw strong buying from the weekly Quasimodo support level at 1.5007 (located within weekly demand at 1.4812-1.5097). This consequently forced the market to attack a weekly swap level coming in at 1.5270. Selling opposition was clearly too strong on this occasion as the market closed just below this level at 1.5233. It will be interesting to see what the lower timeframes has to say about this…

Daily Timeframe: The rebound seen from the aforementioned weekly swap level on the daily timeframe appears weak. Friday’s positive NFP numbers potentially saved this weekly swap level from complete annihilation. The majority of technical sellers were already likely stopped out here on Thursday (strong bull candle), which in turn possibly did two things:

1. Gave pro money the liquidity i.e. buy stops to short during NFP.
2. Cleared the path north towards a daily swap level seen at 1.5433.

4hr Timeframe: Recent developments on the 4hr timeframe show price has broken above (blue arrow) a 4hr supply area at 1.5318-1.5270, which in turn has likely caused three things to happen:

1. Consumed the majority of sellers out (stopped out).
2. Trapped breakout buyers.
3. Cleared the path north towards the aforementioned daily swap level.

Taking the above into consideration, we feel that the GBP still has potential. Admittedly, price is trading around a weekly swap level resistance (1.5270) at the moment, but looking at how price reacted to this hurdle does not exactly feel us with confidence to begin looking for shorts at this point in time. This coupled with the 4hr timeframe showing clear direction north (point 3 above), our bias is long for the time being.

That being the case, we have placed a pending buy order at 1.5183 just above a 4hr decision-point demand area coming in at 1.5138-1.5178. We believe this area to be where pro money ’made the decision’ to break above the aforementioned 4hr decision-point supply area, therefore we feel that there’s a good chance unfilled buy orders are still lurking here. What is also interesting about this 4hr decision-point demand area is the fact the round number 1.5200 is floating just above it. This will likely be a magnet for price, and with psychological numbers prone to fakeouts, we’re expecting price to do just that – fake below and fill our order before rallying higher as per the green arrows.

Current buy/sell levels:

• Buy orders: 1.5183 (Predicative stop-loss orders are seen at: 1.5133).

• Sell orders: Flat (Predicative stop-loss orders are seen at: N/A).

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