Daily Timeframe: The unfortunately shows very little other than the fact that last week was certainly a slow one.
At the time of writing, price is still trading within a daily decision-point demand area at 1.55602-1.56802 (located within the weekly demand area mentioned at 1.54260-1.56110). Nonetheless – like the , the 1.57166 resistance barrier is currently holding the market lower resulting in tight ranging action being seen.
A close above here would need to be seen before we would consider taking any longer/medium-term buy positions on this pair. A close below on the other hand could potentially signal buying weakness within the weekly demand area, since price could potentially decline down to as far as 1.54344, a daily resistance swap level.
4hr Timeframe: For anyone who follows our analysis on a regular basis, you may recall us having an active buy position (1.56166) on the pound. We have now closed at 1.56808 for two reasons - price was not making any progress on the higher timeframes in that it was not showing us any direction north, and secondly, it was Friday, and we were not comfortable leaving the position open over the weekend.
In our opinion, the GBP/USD is in a state of consolidation right down from the weekly to the 4hr timeframe. The 4hr timeframe shows dreamy price action for range traders due to the market being firmly trapped between a 4hr supply area at 1.57208-1.56927 (surrounds the weekly resistance swap level at 1.57166) and a 4hr demand area seen at 1.55917-1.56299 (located within both weekly and daily demand – see above). Tentative buy orders are seen around 1.56340, and sells at 1.56887. Using lower-timeframe confirmation to enter here is recommended, as it will probably save you from unnecessary losses that may occur if a fakeout is seen.
A break above the current range would likely force prices up to a 4hr supply area coming in at 1.57804-1.57578, and at the same time likely confirm some buying strength has entered the market from the aforementioned higher-timeframe demand areas. Conversely, a break lower would almost immediately see prices trading around 1.55737, a 4hr long-term support swap level. We will certainly be watching the lower timeframe action at this level for an entry long around 1.55759. In the event that price breaks below this level, buyers will likely be in serious trouble as the next area of demand comes in at 1.55, take a look to the left and see why. Demand appears to have already been consumed – demand consumption tails are seen at 1.55802/1.55208.
• Buy orders: 1.56340 (Predicative stop-loss orders seen at: 1.55816) 1.55759 (Predicative stop-loss orders seen at: Dependent on how one confirms this level).
• Sell orders: 1.56887 (Predicative stop-loss orders seen at: 1.57400).