• Weekly closing price: 1.5028
• Weekly opening price: 1.5031
Following the selling wick printed off the underside of weekly supply at 1.5506-1.5305, traders continued to short the GBP last week down into the jaws of demand at 1.4855-1.5052, consequently painting a full-bodied candle.
Daily price on the other hand shows that there’s room for further downside this week towards swap support coming in at 1.4987, which merges beautifully with channel support extended from the low 1.5162. Considering the strength of last week’s candle, and little supportive structure seen to the left of current price, we feel the above said swap support may come into play early on this week.
A quick recap of Friday’s H4 activity reveals the GBP punched lower going into London trade, taking out both support (now resistance) at 1.5071 and mid-level support 1.5050, before driving deep into demand at 1.5027-1.5044 by the week’s end.
Consequent to a relatively stable open this morning price remains trading within the above said demand. Although this is lurking within the aforementioned weekly demand at 1.4855-1.5052, we remain wary of buying from here. The reasons for why is, for one, mid-level resistance 1.5050 is hovering just above like a big rain cloud, and two, daily structure (as we mentioned above) suggests the GBP may decline further yet. With that being said, what we are now interested in is the large psychological number 1.5000 below. Other than the fact that this is a huge number market participants focus on, we also see the following supporting structures:
• Located deep within the above said weekly demand.
• 1.5000 hovers just above a daily swap (support) level at 1.4987.
• It also converges beautifully with daily channel support extended from the low 1.5162.
When, or indeed if price reaches this number, we would consider entering long at market from here (dependent on the time of day) and placing our stop at 1.4955 beyond the low formed on the 24/04/15 at 1.4959.
Levels to watch/ live orders:
• Buys: 1.5000 (Stop loss: 1.4955).
• Sells: Flat (Stop loss: N/A).