ICmarkets

Interesting price action being seen on Cable!

FX:GBPUSD   Pound Sterling/U.S. Dollar
163 0 6
The past week saw Cable aggressively whipsaw to a low of 1.4052 (just missing a broken weekly Quasimodo support line (BQM) at 1.4051) up to a high of 1.4515, which saw the market close around 100 pips in the green at 1.4473. Consequent to this, a nice-looking weekly pin-bar formed which firmly places the BQM weekly resistance line at 1.4633 in the picture this week.

Down on the daily chart , we can see that price retested a recently broken supply-turned demand at 1.4407-1.4350 which took form in the shape of an indecision candle. The main takeaway from this timeframe, however, is the fact that selling pressure may come into this market earlier than the weekly BQM resistance line, as there’s a clear barrier of resistance lurking just above current prices at 1.4565. In addition to this, we also like the collection of selling wicks that formed around this region back in mid-Feb (marked by the black arrow), suggesting that this level was clearly a sought-after barrier at one point.

Friday’s movement on the H4 chart rebounded from the 1.4500 handle early on in the session, reaching lows of 1.4410 going into the London open where aggressive bids forced this market back up to 1.4500 into the close.

Given the above information, our battle lines remain unchanged from Friday’s report:

• Buying on the break/retest of 1.4500 is certainly a possibility for an intraday trade today. However, we would not be expecting much more than the 1.4550/1.4600 region on this one. Reason being is by that point you’d be entering into higher-timeframe resistance territory (see above).

• In regard to sells, the 1.4550/1.4600 (green rectangle ) area is a reasonable zone to look to short since in between here sits daily resistance at 1.4565. We would, however, advise waiting for the lower timeframes to confirm selling strength due to a H4 Quasimodo resistance level lurking above at 1.4649, which fuses nicely with the weekly BQM resistance line at 1.4633 (a potential level to short at market).

Levels to watch/live orders:

• Buys: Watch for price to consume the 1.4500 level and look to trade any retest seen thereafter (Lower timeframe confirmation required).
• Sells: 1.4550/1.4600 Tentative – confirmation required (Stop loss: dependent on where one confirms this area). 1.4649 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).

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