Weekly gain/loss: - 177 pips
Weekly closing price: 1.2369
Breaking a three-week bullish phase, weekly bears rose up and took charge last week bringing the pound to within striking distance of the 2017 yearly opening level at 1.2329. Also of particular interest on the weekly timeframe is the potential bearish pennant currently in motion (1.2774/1.1986).
Climbing down to the daily candles, we can clearly see that the 2017 yearly opening level mentioned above is housed within the lower extremes of a daily demand base pegged at 1.2323-1.2379. This area held price beautifully on the 29th March, so we may see history repeat itself here.
Disappointing manufacturing and industrial production out of the UK on Friday sent the pair below the H4 mid-level support 1.2450. Further downside was seen shortly after this despite US non-farm payrolls coming in lower than expected. The week ended with the H4 candles closing beyond March’s opening level at 1.2378.
Our suggestions: To make a long story short, we are currently interested in the 1.23/1.2334 (green) region for longs on the H4 chart. The reasons for why are as follows:
• There’s a H4 AB=CD (filled arrows) 161.8% Fib ext. at 1.2334 taken from the high 1.2556. This denotes the top edge of our buy zone.
• There’s also a H4 AB=CD (dashed arrows) 127.2% Fib ext. at 1.2310 drawn from the high 1.2615.
• A psychological barrier at 1.23, which represents the lower limit of our buy zone.
• Although this H4 buy zone slightly surpasses the daily demand at 1.2323-1.2379, we still consider this to be a plus point having this area involved.
• Housed within the buy zone and the daily demand area we have the 2017 yearly opening level at 1.2329.
To avoid any fakeout beyond 1.23, however, one may want to consider waiting for a reasonably sized H4 bullish candle to form prior to pressing the buy button. Stops can then be placed beyond this trigger candle.
Data points to consider: Fed Chair Yellen speaks at the University of Michigan at 9.10pm GMT.
Weekly closing price: 1.2369
Breaking a three-week bullish phase, weekly bears rose up and took charge last week bringing the pound to within striking distance of the 2017 yearly opening level at 1.2329. Also of particular interest on the weekly timeframe is the potential bearish pennant currently in motion (1.2774/1.1986).
Climbing down to the daily candles, we can clearly see that the 2017 yearly opening level mentioned above is housed within the lower extremes of a daily demand base pegged at 1.2323-1.2379. This area held price beautifully on the 29th March, so we may see history repeat itself here.
Disappointing manufacturing and industrial production out of the UK on Friday sent the pair below the H4 mid-level support 1.2450. Further downside was seen shortly after this despite US non-farm payrolls coming in lower than expected. The week ended with the H4 candles closing beyond March’s opening level at 1.2378.
Our suggestions: To make a long story short, we are currently interested in the 1.23/1.2334 (green) region for longs on the H4 chart. The reasons for why are as follows:
• There’s a H4 AB=CD (filled arrows) 161.8% Fib ext. at 1.2334 taken from the high 1.2556. This denotes the top edge of our buy zone.
• There’s also a H4 AB=CD (dashed arrows) 127.2% Fib ext. at 1.2310 drawn from the high 1.2615.
• A psychological barrier at 1.23, which represents the lower limit of our buy zone.
• Although this H4 buy zone slightly surpasses the daily demand at 1.2323-1.2379, we still consider this to be a plus point having this area involved.
• Housed within the buy zone and the daily demand area we have the 2017 yearly opening level at 1.2329.
To avoid any fakeout beyond 1.23, however, one may want to consider waiting for a reasonably sized H4 bullish candle to form prior to pressing the buy button. Stops can then be placed beyond this trigger candle.
Data points to consider: Fed Chair Yellen speaks at the University of Michigan at 9.10pm GMT.
IC Markets is an online forex broker specialized in providing transparent trading solutions to both retail and institutional investors alike. We provide superior execution technology, lower spreads and unrivaled liquidity.