Two areas of interest on the pound today...
Underpinned by a better-than-expected UK inflation print, yesterday’s action saw the GBP squeeze shorts out from the 1.27 boundary as well as fill breakout buyers’ orders. Be that as it may, the pair failed to push much past this region, reaching highs of only 1.2727 before collapsing to lows of 1.2653 throughout the course of the US session. In view of price breaking below the H4 pivot marked with a black arrow at 1.2660, sterling could continue to press lower today down to at least 1.26.
Over on the bigger picture, however, the weekly chart shows the possibility of rallying higher to check in with resistance at 1.2938. Meanwhile, daily action is seen currently lodged mid-range between a resistance area coming in at 1.2928-1.2789 (houses a 61.8% Fib resistance level at 1.2853) and a broken Quasimodo support line at 1.2557 that intersects nicely with a trendline support drawn from the low 1.1904.
Our suggestions: With the above points in mind, there are two areas that catch our eye this morning:
1. The H4 mid-way support at 1.2550. This level boasts two H4 trendline supports taken from the lows 1.2113/1.2301 and is located nearby the aforementioned daily broken Quasimodo support line. However, trading this area places one at risk of a fakeout down to our next area of interest (see point 2). Therefore, wait at least for a reasonably sized H4 bullish candle to form before pressing the buy button.
2. Between December’s opening level at 1.2514 and the H4 61.8% Fib support at 1.2481 holds not only a psychological support at 1.25 which converges with a H4 AB=CD bull pattern, there’s also a H4 trendline support extended from the high 1.2673 intersecting with this barrier. Granted, a trade from this area does mean that a slight fakeout beyond the above said daily broken Quasimodo support is required. Dependent on the time of day, this zone holds enough confluence, at least in our book, to justify a long position without the need to wait for other confirmation.
From a fundamental standpoint, both currencies boast market-moving events today, specifically in the US with the FOMC set to make a decision on interest rates. Therefore, remain vigilant trading this pair today!
Data points to consider: UK employment data at 9.30am, followed by BoE Gov. Carney taking the stage at 12.15pm. US retail sales/PPI reading at 1.30pm, Industrial production and capacity utilization rate at 2.15pm and finally the FOMC interest-rate statement and press conference at 7-7.30pm GMT.
Levels to watch/live orders:
• Buys: 1.2550 region (reasonably sized H4 bullish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle). 1.2505 (dependent on the time of day, a buy from this area is high probability, stop loss 1.2476).
• Sells: Flat (stop loss: N/A).
Over on the bigger picture, however, the weekly chart shows the possibility of rallying higher to check in with resistance at 1.2938. Meanwhile, daily action is seen currently lodged mid-range between a resistance area coming in at 1.2928-1.2789 (houses a 61.8% Fib resistance level at 1.2853) and a broken Quasimodo support line at 1.2557 that intersects nicely with a trendline support drawn from the low 1.1904.
Our suggestions: With the above points in mind, there are two areas that catch our eye this morning:
1. The H4 mid-way support at 1.2550. This level boasts two H4 trendline supports taken from the lows 1.2113/1.2301 and is located nearby the aforementioned daily broken Quasimodo support line. However, trading this area places one at risk of a fakeout down to our next area of interest (see point 2). Therefore, wait at least for a reasonably sized H4 bullish candle to form before pressing the buy button.
2. Between December’s opening level at 1.2514 and the H4 61.8% Fib support at 1.2481 holds not only a psychological support at 1.25 which converges with a H4 AB=CD bull pattern, there’s also a H4 trendline support extended from the high 1.2673 intersecting with this barrier. Granted, a trade from this area does mean that a slight fakeout beyond the above said daily broken Quasimodo support is required. Dependent on the time of day, this zone holds enough confluence, at least in our book, to justify a long position without the need to wait for other confirmation.
From a fundamental standpoint, both currencies boast market-moving events today, specifically in the US with the FOMC set to make a decision on interest rates. Therefore, remain vigilant trading this pair today!
Data points to consider: UK employment data at 9.30am, followed by BoE Gov. Carney taking the stage at 12.15pm. US retail sales/PPI reading at 1.30pm, Industrial production and capacity utilization rate at 2.15pm and finally the FOMC interest-rate statement and press conference at 7-7.30pm GMT.
Levels to watch/live orders:
• Buys: 1.2550 region (reasonably sized H4 bullish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle). 1.2505 (dependent on the time of day, a buy from this area is high probability, stop loss 1.2476).
• Sells: Flat (stop loss: N/A).
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