ICmarkets

GBP/USD: Technical outlook and review.

FX:GBPUSD   British Pound/U.S. Dollar
120 0 1
Weekly Timeframe: The weekend gap has forced prices to trade below the weekly flip support level at 1.62591, if follow-through selling is seen, the near-term weekly demand area at 1.58533-1.60157 will likely be hit soon.

Daily Timeframe: The gap below daily demand at 1.62510-1.63401 seen at the beginning of the week likely signals a continuation move down to around a fantastic-looking area of daily support at 1.58992 (neatly located within the aforementioned weekly demand area), since looking to the left of current price, most of the daily demand zones appear to have already been consumed. However, active buyers seem to be coming into the market around the 1.60506 level, which could potentially bring prices up to the daily demand flip area at 1.62510-1.63401. This could very well be pro money at work here, rallying price higher in order to entice buyers into the market, only later to sell into them, only time will tell though.

4hr Timeframe: Pro money clearly had already accumulated enough liquidity (sell orders to buy into) without needing to bring prices down into the 4hr demand area below at 1.59875-1.60350. The accumulation of sell orders around the round number 1.61, and an ever-so subtle fakeout of the low 1.60580 was all that was needed to rally prices higher.

A small bullish close has recently been seen above the round number 1.62, nevertheless, in our opinion this round number may not hold since the sellers around the high marked with a blue arrow at 1.62317 have yet to be consumed. It may be a good idea to remember the manipulation games that are played by pro money, they know as well as we do that price is trading above a heavy-weight weekly demand area at 1.58533-1.60157, so everyone is expecting higher prices, and quite a lot of traders will already likely be long. Stopping out all these unwanted traders (who are now long) by pushing prices south once again right down to the aforementioned 4hr demand area will cause panic and frustration, thus forcing traders to cover their positions essentially by selling (if a trader buys into the market, once that trader closes, their order becomes a sell), perfect for pro money to buy into.

Pending orders/Price action             confirmation levels:

• Areas to watch for buy orders: Pending orders: 1.60112 (Stop loss: 1.59586 Take profit levels(s): Dependent on how price approaches) Price action             confirmation levels: No price action             confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: Pending orders: 1.62667 (Stop loss: 1.63517 Take profit levels(s): Dependent on how prices approaches) Price action             confirmation levels: No price action             confirmation sell levels are seen in the current market environment.
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