Weekly Timeframe: The weekly picture shows that cable declined over 300 pips into the close (1.4725) last week. This move consequently took out both the weekly Quasimodo support level at 1.5007, and a major weekly swap level seen at 1.4832, which, as you can probably see, leaves the weekly demand area seen below at 1.4225-1.4482 clearly in the limelight for the time being.
Daily Timeframe: Friday saw the GBP close below a daily swap level coming in at 1.4774, which likely cleared the path down to a minor daily swap level seen at 1.4652. This level, as far as we can see, remains a key obstacle to a move towards the daily demand area positioned below at 1.4343-1.4465 (located within the aforementioned weekly demand area).
4hr Timeframe: Given that both the weekly and daily timeframes are indicating room for a further decline this week (see above); our team has reported that short trades will be our main focus for the time being.
The recent decent on the 4hr timeframe saw price take out the 1.4800 number, and consequently force price down towards 1.4700, which, as you can see, supported buying into the close. This, on its own, could attract further buying today and push price up to the daily swap level seen marked in red at 1.4774 to be retested as resistance. It would be here that we’d begin watching the lower timeframes for selling confirmation around the 1.4770 mark. However, considering that the 1.4800 number is lingering just above here like a big rain cloud, traders should be prepared for a fake higher before any selling is seen. First-take-profit target for this trade, should a sell signal be seen, comes in at 1.4700.
Current buy/sell orders:
• Buy orders: Flat (Predicative stop-loss orders are seen at: N/A).
• Sell orders: 1.4770 [Tentative – confirmation required] (Predicative stop-loss orders are seen at: dependent on where one confirms this level).