ICmarkets

The week ahead on the GBP

FX:GBPUSD   British Pound / U.S. Dollar
194 0 3
Weekly Timeframe: The weekly timeframe saw relatively strong selling come into the market last week deep from within a major weekly swap area positioned at 1.5426-1.5561. In the event that further selling is seen this week, price could potentially hit a weekly swap level seen at 1.5270.

Daily Timeframe: The daily timeframe shows that on Thursday price reacted just beautifully to a daily supply area seen at 1.5619-1.5548 (located around the upper limits of the aforementioned weekly swap area). That being said though; support did come into the market on Friday around Monday’s opening price at 1.5391. Our team remains on the sidelines here as to whether this number will be strong enough to support further buying this week. A break below here could very well force the market down towards a small daily swap level seen at 1.5351. Let’s take a look at what the 4hr timeframe has to say about this…

4hr Timeframe: The 4hr timeframe has been, and still is trading within a 4hr ascending channel (1.5343/1.5195), which is clearly being respected at the moment. Contrary to what the higher timeframes are saying, the 4hr chart is in what we like to call a ‘buy zone’. This comprises of a 4hr demand area seen at 1.5331-1.5384, which, as you can see, not only encapsulates the aforementioned daily swap level, but also converges beautifully with the lower limit of the 4hr ascending channel (see above).

Given that the weekly chart is showing price trading around supply at the moment, and the daily timeframe action is currently meandering around questionable support (see above), we have decided that any buys taken from the aforementioned 4hr demand area will need lower timeframe confirmation and easy-to-reach targets, as you do not really want to be caught on the wrong side of the weekly timeframe!

In the event that this 4hr demand area is consumed this week, the path south will likely be free down to at least the 1.5300 level, which, if you remember from the weekly timeframe is only 30 pips above a major weekly swap level at 1.5270.

Current buy/sell orders:

• Buy orders: currently watching for lower timeframe confirmation around 4hr demand at 1.5331-1.5384 (Predicative stop-loss orders are seen at: 1.5327).

• Sell orders: Flat (Predicative stop-loss orders are seen at: N/A).


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