Interesting combination of price action GBP/USD
GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Down more than 9% in the month of March, south of trendline resistance (1.7191) traders pushed through a familiar area of support at 1.1904/1.2235 in recent trading. With price toying with lows not seen since the 1980s, the next observable support target on the monthly timeframe falls in around 1.1297, a 127.2% Fib ext. level.
Daily timeframe:
Partially altered from previous analysis -
Downside risks continue to build in GBP/USD after rattling trendline support (1.2373) last week and pulling the RSI indicator deep into oversold terrain. Down more than 5% on the week, a decisive hold beneath the said trendline support places the weekly 127.2% Fib ext. firmly on the radar at 1.1297.
The 200-day SMA has also begun turning lower after flattening since November 2019.
H4 timeframe:
Fading historic lows, GBP/USD H4 activity is in the process of possibly chalking up an AB=CD bearish configuration (orange), terminating within the upper boundary of fresh supply at 1.2192/1.2049. Combining the area of stacked supply just above at 1.2273/1.2198 and 1.2162/1.2220, we have ourselves a strong area of confluence on this timeframe, in the event we reach levels this far north this week.
H1 timeframe:
Friday ended a tumultuous week closing strongly above 1.16, after a decisive decline from peaks above 1.19 and the 100-period SMA at the beginning of US trade. A rather large ascending channel (1.1410/1.1932) is in process, with 1.17 seen close by as potential resistance.
Ruled largely by round numbers on this timeframe, a break of 1.17 has 1.18 in the firing line, followed by 1.19 (and the 100-period SMA) and then 1.20 which happens to be encapsulated within supply at 1.2045/1.1982.
Interestingly, we also broke RSI trendline support and trade sub 50.00.
Structures of Interest:
Long term:
From longer-term charts, price action is ripe for additional downside, particularly if we retake (on a daily basis) daily trendline support.
Short term:
While there’s a chance the H4 AB=CD bearish pattern may not come to fruition, it’s still worth keeping an eye on this week, as it could prove to be monstrous resistance, given the supply present in this area.
Ultimately, H1 is bullish until locking horns with 1.17, therefore the latter could also prove valuable resistance this week. Conservative traders, however, will likely seek additional confirmation before committing, given the increased volatility.
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Down more than 9% in the month of March, south of trendline resistance (1.7191) traders pushed through a familiar area of support at 1.1904/1.2235 in recent trading. With price toying with lows not seen since the 1980s, the next observable support target on the monthly timeframe falls in around 1.1297, a 127.2% Fib ext. level.
Daily timeframe:
Partially altered from previous analysis -
Downside risks continue to build in GBP/USD after rattling trendline support (1.2373) last week and pulling the RSI indicator deep into oversold terrain. Down more than 5% on the week, a decisive hold beneath the said trendline support places the weekly 127.2% Fib ext. firmly on the radar at 1.1297.
The 200-day SMA has also begun turning lower after flattening since November 2019.
H4 timeframe:
Fading historic lows, GBP/USD H4 activity is in the process of possibly chalking up an AB=CD bearish configuration (orange), terminating within the upper boundary of fresh supply at 1.2192/1.2049. Combining the area of stacked supply just above at 1.2273/1.2198 and 1.2162/1.2220, we have ourselves a strong area of confluence on this timeframe, in the event we reach levels this far north this week.
H1 timeframe:
Friday ended a tumultuous week closing strongly above 1.16, after a decisive decline from peaks above 1.19 and the 100-period SMA at the beginning of US trade. A rather large ascending channel (1.1410/1.1932) is in process, with 1.17 seen close by as potential resistance.
Ruled largely by round numbers on this timeframe, a break of 1.17 has 1.18 in the firing line, followed by 1.19 (and the 100-period SMA) and then 1.20 which happens to be encapsulated within supply at 1.2045/1.1982.
Interestingly, we also broke RSI trendline support and trade sub 50.00.
Structures of Interest:
Long term:
From longer-term charts, price action is ripe for additional downside, particularly if we retake (on a daily basis) daily trendline support.
Short term:
While there’s a chance the H4 AB=CD bearish pattern may not come to fruition, it’s still worth keeping an eye on this week, as it could prove to be monstrous resistance, given the supply present in this area.
Ultimately, H1 is bullish until locking horns with 1.17, therefore the latter could also prove valuable resistance this week. Conservative traders, however, will likely seek additional confirmation before committing, given the increased volatility.