The pound is seen trading with a reasonably strong bias to the upside this morning. From a technical standpoint, weekly support at 1.2942 appears to be holding ground fairly well, as is the daily demand base at 1.2789-1.2928, which happens to connect with a trendline
support taken from the low 1.2789. In addition to this recent buying, we can see that the key figure 1.30 was consumed as the markets entered yesterday’s US session. To our way of seeing things, the close above 1.30 has somewhat confirmed buying strength around the above said higher-timeframe structures, and has, according to the H4 chart, likely opened the path north up to a Quasimodo resistance at 1.3091 (merges with the 1.31 handle and a trendline
resistance taken from the high 1.3371).
Our suggestions: Despite the predominant trend on this pair pointing in a southerly direction at present, a successful retest of 1.30 as support followed by a H4 bullish
close would be enough to consider buying this market, targeting the aforementioned H4 Quasimodo barrier (see black arrows). However, we would not recommend setting and forgetting this trade, simply because prices may turn ahead of our target around the underside of the daily resistance zone
seen at 1.3064-1.3104 (the next upside target on the daily timeframe
), so remain vigilant guys!
On a side note traders, both the Fed Chair Janet Yellen and ECB’s President Draghi take the stage today between 2-2.30pm GMT
, so expect volatile moves during this time.