ICmarkets
Long

Potential Harmon Bat completion with four-drive approach

FX:GBPUSD   British Pound/U.S. Dollar
183 0 2
Weekly view – The weekly timeframe shows that the rebound seen from the weekly supply area at 1.5824-1.5634 extended lower last week, consequently forcing the GBP to close negatively at 1.5288. As per this chart, we see absolutely no reason why price will not continue to sell off this week down towards 1.5144.

Daily view: Following the break and retest of the daily Quasimodo area at 1.5478-1.5435 last week, price sold off just missing the daily demand zone seen at 1.5088-1.5216 (surrounds the weekly buy level 1.5144) by twenty or so pips. Therefore, with price not yet at any demand on this timeframe, there’s a good chance the pound will continue to sell off today.
4hr view: Friday’s trading day saw Sterling heavily sell off from 1.5341 and close below 1.5300, which as you can see was retested as resistance going into the close.

The open 1.5289 suggests that there was not really any big change seen over the weekend.

The analysis for this pair is relatively straightforward. If 1.5300 is able to hold this market lower, we may see price greet the 4hr Harmonic Bat completion area seen in green at 1.5224-1.5164 (located around the upper limits of the aforementioned daily demand area) sometime today or early on in the week. The symmetry we’ve seen on the approach to this 4hr Harmonic support zone has been beautiful – check out the already formed three-drive pattern marked with pink arrows. If 1.5300 does indeed hold we may see a final push consequently forming a four-drive pattern into our point of interest, which in itself is a reversal signal. However, this is not the only thing we have supporting the 4hr Harmonic completion zone. It is located within the upper limits of the aforementioned daily demand area, and also converges with not only a round number 1.5200, but with a 4hr demand area seen marked with a red arrow at 1.5162-1.5191 as well. With all of the above in mind, our team has decided that this 4hr Harmonic zone is worthy of a pending buy order – buy at 1.5228 with a stop placed just below at 1.5140.

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).

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