ICmarkets

GBP/USD Technical outlook and review.

FX:GBPUSD   British Pound/U.S. Dollar
39 0 1
4hr TF.

The higher picture resembles the following:

• Buyers are still seen deep within weekly supply territory at 1.76297-1.67702, with a little interest being shown by the sellers at the moment.

• The daily timeframe still shows price is currently trading in no man’s land between daily supply above at 1.76297-1.73024 and daily S/R flip level seen below at 1.69712.

Price did the unexpected! After we saw a break of the high marked with an arrow at 1.71428, it shot up like a rocket, but missed the round number 1.72000 by about 10 pips or so, and this is where the sellers took over.

Since we did not fully hit the aforementioned round number level, supply is still expected to be around this area. If we think about it this way, why would price stop 10 pips away from a level millions of traders are no doubt watching? This would confuse a lot of traders, no? The high 1.71905 printed just before the round number 1.72000 is a nice area to fakeout when, or indeed if price does return to this area. Traders on the timeframes lower than the 4hr would see this as a likely level to sell at, no doubt placing their stops a few pips above the round number 1.72000. Pro money likely know this, and will use It to their advantage by pushing price hard into the aforementioned round number stopping out tons of traders who are both attempting to fade the level, and to buy the breakout, what does this give pro money? BUY orders for them to sell into! So still do watch this round number level for a bearish reaction that may be seen soon.

Since the sellers are in control at the moment, where could they be likely taking price? An obvious area would be the round number 1.71000, but an area that would give pro money the best price and possibly enough liquidity (sell orders in this case) would be just below at the 4hr S/R flip area (1.70617-70459), so do keep on an eye on both of these levels for a possible bullish reaction.

Pending/P.A confirmation orders:

• Pending buy orders (Green line) are seen just above demand (1.70617-1.70459) at 1.70662. The reason a pending buy order has been set here is because the buyers have now proved this area by consuming sellers around the high marked with an arrow at 1.71428 thus possibly clearing the path north up to around the round number 1.72000 area. A retracement down to the 4hr S/R flip area at 1.70617-1.70459 is expected soon to gather liquidity, which should in turn fill the aforementioned pending buy order in the process.
• No P.A confirmation buy orders (Red line) are seen in the current market environment.

• No pending sell orders (Green line) are seen in the current market environment.
• P.A confirmation sell orders (Red line) are seen just below the round number 1.72000 at 1.71943. We have placed a P.A confirmation sell order here simply because these psychological levels are prone to deep tests/spikes, so sometimes it is better to wait for that all important confirmation.

• Areas to watch for buy orders: P.O: 1.70622 (SL: 1.70423 TP: Dependent on price approach) P.A.C: No P.A confirmation buy orders are seen in the current market environment.

• Areas to watch for sell orders: P.O: No pending sell orders are seen in the current market environment. P.A.C: 1.71943 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).
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