ICmarkets

GBP/USD: Technical outlook and review.

FX:GBPUSD   British Pound/U.S. Dollar
110 0 0
4hr TF

The higher-timeframe picture resembles the following:

• Weekly TF: A break below the weekly demand area at 1.66917-1.67939 has just been seen, clearly there is very strong selling pressure coming out of the weekly supply area at 1.76297-1.67702! Prices could now very well be forced to test the weekly demand area below at 1.64589-1.66339.

• Daily TF: A positive daily close below the daily demand area at 1.67367-1.68440 has been seen, price is likely to test the daily demand area below at 1.65492-1.66044 (which is conveniently located within weekly demand at 1.64589-1.66339), as most of the demand/buyers to the immediate left appear to have already have likely been consumed by two prominent tails/spikes (1.66559/1.66978).

A spike up to the 4hr supply area around the 1.68518 area was seen before the sellers quite literally took over the market, as a result price slammed through the 4hr demand area at 1.67389-1.67561, and also at the time of writing the round number 1.67.

We have to be honest here, this was unexpected, we did not think, judging by the price action surrounding the 1.68518 area that a bearish reaction of this magnitude from here would be seen!

With the current market developments, both weekly and daily demand areas (see above for levels) have been consumed, meaning it is likely we may see more selling to the downside relatively soon on those timeframes. What we see below the round number 1.67 is a nice-looking fresh 4hr demand area at 1.65492-1.65809, and very little in between here to stop price reaching it! We have placed two P.A confirmation sell orders. The first being the lowest below the round number at 1.66961, as a retest may well be seen, and the second, below the 4hr D/S flip area (1.67389-1.67561) at 1.67327, as price could very well ignore the aforementioned round number altogether.

Pending/P.A confirmation orders:

• The pending buy order (Green line) set just above 4hr demand (1.67389-1.67561) at 1.67601 has been stopped out; fortunately a little profit was already locked in!
• The P.A confirmation buy order (Red line) set just above the round number 1.68 at 1.68042 has been removed, since price traded too far south from the entry level for the time being.

• The pending sell order (Green line) set just below a 4hr decision-point area (1.68919-1.68789) at 1.68747 has been cancelled, since price dropped too far from the entry level for the time being.
• New P.A confirmation sell orders (Red line) are seen just below the round number 1.67 at 1.66961. The reasoning behind placing a P.A confirmation sell order here is simply because price could very well ignore this round number, and continue trading north to around the 4hr D/S flip area above at 1.67389-1.67561.
• New P.A confirmation sell orders (Red line) are seen just below the 4hr D/S flip area (1.67389-1.67561) at 1.67327. A P.A confirmation sell order was used here because there is no logical area for a stop-loss order on the 4hr timeframe at least.

• Areas to watch for buy orders: P.O: No pending buy orders are seen in the current market environment. 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: 1.67327 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed) 1.66961 (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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