ICmarkets

Some interesting P.A seen on cable guys...

FX:GBPUSD   British Pound/U.S. Dollar
128 0 6
Shortly after the week’s open, cable rocketed north from a H4 support line seen at 1.3034. Going into yesterday’s London’s session the pair closed above the 1.31 band, but it was not until the US session kicked in did we see price reach highs of 1.3157.

With price action stabilizing around the 1.3150 region at the moment, let’s see how the land lies on the higher-timeframe picture. Over on the daily chart , we can see that price has closed back above resistance at 1.3104, thus potentially opening up the path north for a run towards daily supply coming in at 1.3371-1.3279. In support of this move, weekly candles recently chalked up a relatively nice-looking bullish engulfing candle last week, which could possibly propel sterling north this week.

Although there is some indication that this pair may rally, one has to bear in mind that the predominant trend remains firmly pointing south.

Our suggestions: Watch for price to retest 1.31 today. Should this come into view and one is able to spot a lower timeframe buy signal, a long from this platform is valid in our opinion, targeting 1.32, followed by the H4 harmonic Gartley reversal zone seen between 1.3346/1.3263 (green zone).

The other key thing to note here is, given that this H4 harmonic area is lodged within the daily supply mentioned above at 1.3371-1.3279, it’s a beautiful zone not only for taking profits but also for selling!

Levels to watch/live orders:

• Buys: 1.31 region Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: 1.3346/1.3263 (Keep a close eye on this area as it boasts strong confluence).

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