GBP/USD: Technical outlook and review.

FX:GBPUSD   British Pound / U.S. Dollar
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Weekly Timeframe: A beautiful to-the-pip touch was seen at a weekly decision-point supply area at 1.66429-1.65340 last week, which brought prices back down to a weekly resistance flip level seen at 1.62591. This week, we will be watching for lower-timeframe bullish price action around this level. However, if this level gives way, it would likely encourage follow-through selling down to weekly demand seen at 1.58533-1.60157.

Daily Timeframe: The daily timeframe shows price is trading very close to an important daily support flip level at 1.62503, take a look at the past, it’s a thing of beauty (this is essentially the same as the weekly resistance flip level, only seen in more detail on the daily timeframe ).

Assuming we see bullish price action around this daily level, the potential to the upside is huge, as we would likely target the1.66429-1.66057 area. On the other hand, if this level gives way, further selling may very well be seen down to daily demand at 1.60507-1.61044, which sits just above weekly demand at 1.58533-1.60157.

4hr Timeframe: It was reported in the previous analysis that price was (at that time) too close to resistance (1.63) to justify entering long at market around the 4hr demand area at 1.62453-1.62776. We also said that if price was to close above this level (1.63) without hitting the 1.64 level; we would try to enter long on a possible retrace.

As we can all see, this has indeed happened, and true to our word, we have placed a pending buy order just above the aforementioned 4hr demand area at 1.62858, this order will remain active as long as the 1.64 level does not get hit, since this is essentially where our first take-profit target will be set.

Assuming our order does get filled, we feel price will very likely hit our first take-profit target due to where price is currently located on the higher timeframes (Weekly support: 1.62591, Daily support: 1.62503).

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: 1.62858 (Stop loss: 1.62398 Take profit: Dependent on how price approaches). Price action confirmation levels: No price action confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment. Price action confirmation levels: No price action confirmation sell levels are seen in the current market environment.
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