ICmarkets
Long

GBP/USD: Technical outlook and review...

FX:GBPUSD   Pound Sterling/U.S. Dollar
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Weekly view – The latest coming in from this timeframe shows us that price printed a strong bull candle going into last week’s close 1.5551, consequently engulfing the previous two weekly bear candles. This move, as you can see, also forced price above a weekly swap level at 1.5451, which in turn likely opened the gates for the market to challenge the weekly supply area at 1.5824-1.5634 sometime this week.

Daily view: Throughout the course of Thursday and Friday’s trading, the buyers managed to hold out above the daily swap zone seen at 1.5478-1.5435. This is quite a feat considering the size of the monster daily supply area seen just above it at 1.5698-1.5530 (located just below the aforementioned weekly supply area). Should we see further buying take place this week, and the current daily supply zone taken out (which is a strong possibility considering last week’s close ), then the next objective to reach is the daily resistance area directly above at 1.5824-1.5734 (located deep within the aforementioned weekly supply area).

4hr view: Friday’s trading saw price aggressively rally going into the U.S session. This took out not only 1.5500, but also spiked above a 4hr Quasimodo resistance base sitting at 1.5586-1.5566 just missing 1.5600 by a couple of pips!

The open 1.5541 shows that no big changes took place over the weekend. At the time of writing, however, price is seen nibbling at the underside of the aforementioned 4hr Quasimodo base, which in our opinion, will likely repel the market today. This is what we hope anyway since there is a terrific buy zone (pink circle) located just below at the 4hr demand area at 1.5465-1.5490. If price reaches this low, and you’re also considering buys here, we would urge you to consider waiting for lower timeframe confirmation due to the fact that the weekly swap level 1.5451 is sitting just below – hence a fakeout is likely.

Below are the reasons why we consider our buy zone to be high probability:

1. The round number sitting just above it at 1.5500 will be a natural magnet to price, and as we all know these barriers tend to see fakeouts. And this fakeout will play right into our zone of interest!
2. The weekly timeframe indicates there is room for this market to move north (see above).
3. The daily swap area at 1.5478-1.5435 is currently holding as support. Granted there is daily supply just above at 1.5698-1.5530 (located just below the weekly supply area at 1.5824-1.5634), but with the weekly timeframe in the position that it is, we’re not too concerned by this.

If all of the above plays out and we manage to find an entry long, our first take-profit target will obviously be dependent on how price approaches the 4hr demand zone . Overall though, we’d be looking to take full profits between 1.5600 and 1.5630, as we would then be very close to entering the aforementioned weekly supply area, and this is not really somewhere where one wants to be long the market!

Levels to watch/ live orders:

• Buys: 1.5465-1.5490 (Stop loss: 1.5459).
• Sells: Flat (Stop loss: N/A).


unbelievable!
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Nice call - got filled at
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