ICmarkets

GBP/USD: Technical outlook and review.

FX:GBPUSD   British Pound/U.S. Dollar
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Weekly Timeframe: Buying interest is currently being seen on the weekly timeframe . This comes after price had spiked through a major weekly demand area at 1.58533-1.60157 last week. Assuming that this is indeed a fakeout, a move to the upside could potentially be seen up to the 1.61837-1.60856 area (weekly supply). Let’s see what the lower timeframes have to say.

Daily Timeframe: In our opinion the daily timeframe is currently showing buying strength, as price has broken above a minor daily support flip level at 1.58736 with room to move up to a small daily decision-point supply area coming in at 1.60210-1.59700.

On a side note, this supply area remains very important to us as it was here that pro money likely made the ‘decision’ to initially break below the aforementioned weekly demand area. If this area of supply is consumed, the path north will likely be free to test 1.61609, a daily support flip level that is located deep within the aforementioned weekly supply area.

4hr Timeframe: The 4hr timeframe shows that price has just recently broken above the round-number level 1.59. Assuming price can close above this level; we see very little reason not to try and attempt to trade the retest targeting a small 4hr supply zone coming in at 1.60008-1.59822, since at the time of writing, we have short-term bullish strength being shown on the daily timeframe (see above) giving us confidence that 1.59 will likely hold (1.59043). However, touch trading psychological levels such as this is always risky, as in our experience these levels are prone to deep tests which normally stops a lot of traders out. Waiting for price-action confirmation on the lower timeframes here works best for us. In the event that price breaks lower, we would definitely consider touch trading the 4hr demand area seen at 1.58338-1.58573 around 1.58604, since this area remains fresh and likely has unfilled buy orders remaining there.

Buy/sell levels:

• Buy orders: 1.59043 (Predicative stop-loss orders seen at: 1.58783) 1.58604 (Predicative stop-loss orders seen at: 1.58283).

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

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