High-probability short opportunity around 1.3290...
Weekly gain/loss: +0.17%
Weekly closing price: 1.3214
Since early October, the GBP/USD has been consolidating beneath a weekly resistance level coming in at 1.3301. Should a breakout to the upside occur, it seems price would be all set to extend up to a weekly channel resistance taken from the high 1.2673. On the other side of the coin, a move to the downside would likely bring the candles down to a weekly demand seen at 1.2589-1.2759 that fuses with a weekly channel support etched from the low 1.1986.
Turning our attention over to the daily candles, it’s clear that downside remains capped by a daily trendline support drawn from the low 1.2108. Also notable is the fact that daily price recently popped higher and came within 20 pips of connecting with a Quasimodo resistance at 1.3279, which happens to be positioned only 20 or so pips beneath weekly resistance mentioned above at 1.3301.
A brief look at recent dealings on the H4 timeframe shows us that price topped just ahead of a supply barrier seen at 1.3299-1.3268 going into the London open on Friday. From that point, the British pound violently whipsawed through the 1.32 handle, tapping a session low of 1.3170, and wrapping up the day closing 14 pips above 1.32.
Suggestions: The H4 supply mentioned above at 1.3299-1.3268 is a heavy-weight area, in our view. Besides housing November’s opening level at 1.3290 and placed nearby the 1.33 band (which essentially represents the aforementioned weekly resistance level), it also encapsulates the noted daily Quasimodo resistance. As a result, buying in and around this area is strictly out of the question for us. A sell on the other hand is interesting. We particularly like November’s opening level as an entry point, with stops planted just above the daily Quasimodo resistance apex (1.3321) at 1.3324.
Data points to consider: ECB President Draghi speaks at 2/4pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.3290 (stop loss: 1.3324).
Weekly closing price: 1.3214
Since early October, the GBP/USD has been consolidating beneath a weekly resistance level coming in at 1.3301. Should a breakout to the upside occur, it seems price would be all set to extend up to a weekly channel resistance taken from the high 1.2673. On the other side of the coin, a move to the downside would likely bring the candles down to a weekly demand seen at 1.2589-1.2759 that fuses with a weekly channel support etched from the low 1.1986.
Turning our attention over to the daily candles, it’s clear that downside remains capped by a daily trendline support drawn from the low 1.2108. Also notable is the fact that daily price recently popped higher and came within 20 pips of connecting with a Quasimodo resistance at 1.3279, which happens to be positioned only 20 or so pips beneath weekly resistance mentioned above at 1.3301.
A brief look at recent dealings on the H4 timeframe shows us that price topped just ahead of a supply barrier seen at 1.3299-1.3268 going into the London open on Friday. From that point, the British pound violently whipsawed through the 1.32 handle, tapping a session low of 1.3170, and wrapping up the day closing 14 pips above 1.32.
Suggestions: The H4 supply mentioned above at 1.3299-1.3268 is a heavy-weight area, in our view. Besides housing November’s opening level at 1.3290 and placed nearby the 1.33 band (which essentially represents the aforementioned weekly resistance level), it also encapsulates the noted daily Quasimodo resistance. As a result, buying in and around this area is strictly out of the question for us. A sell on the other hand is interesting. We particularly like November’s opening level as an entry point, with stops planted just above the daily Quasimodo resistance apex (1.3321) at 1.3324.
Data points to consider: ECB President Draghi speaks at 2/4pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.3290 (stop loss: 1.3324).
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