GBP/USD: Technical outlook and review.
Weekly Timeframe: This week has shown that the buyers broke above a weekly resistance swap level coming in at 1.57166, but nonetheless seems to have found selling opposition around 1.58246. Let’s take a look on the lower timeframes to see what we can find.
Daily Timeframe: The reason for the selling pressure likely comes down to a daily supply area seen at 1.59438-1.58338. For higher prices to be seen on the pound, this area would need to be consumed. If the buyers can hold out above 1.57166 on this timeframe, this could be a signal that buying strength is entering the market.
4hr Timeframe: A nice bearish reaction was seen from the 4hr decision-point supply area at 1.58389-1.58103 (located just below the aforementioned daily supply area). We were clearly wrong not to be looking for shorts there!
As we can all see price is presently trading around a 4hr resistance swap area at 1.57208-1.56927, which surrounds the aforementioned weekly resistance swap level. We will be watching the lower timeframes around the 1.57263 area for some sort of buying confirmation that strength is entering the market. If this area fails, be prepared for acceleration to the downside towards at least the 4hr support area coming in at 1.55917-1.56299, where buying could potentially be seen again (tentative buy orders are seen within the support area at 1.56141). The reason why prices could drop this far is because we believe most of the demand to the left has already been consumed – check out the pink trendline, and the demand consumption tails that form it at 1.56781/1.56475/1.56274.
Buy/sell levels:
• Buy orders: 1.57263 [Tentative] (Predicative stop-loss orders seen at: 1.56876) 1.56141 [Tentative] (Predicative stop-loss orders seen at: 1.55634).
• Sell orders: N/A (Predicative stop-loss orders seen at: N/A).
Daily Timeframe: The reason for the selling pressure likely comes down to a daily supply area seen at 1.59438-1.58338. For higher prices to be seen on the pound, this area would need to be consumed. If the buyers can hold out above 1.57166 on this timeframe, this could be a signal that buying strength is entering the market.
4hr Timeframe: A nice bearish reaction was seen from the 4hr decision-point supply area at 1.58389-1.58103 (located just below the aforementioned daily supply area). We were clearly wrong not to be looking for shorts there!
As we can all see price is presently trading around a 4hr resistance swap area at 1.57208-1.56927, which surrounds the aforementioned weekly resistance swap level. We will be watching the lower timeframes around the 1.57263 area for some sort of buying confirmation that strength is entering the market. If this area fails, be prepared for acceleration to the downside towards at least the 4hr support area coming in at 1.55917-1.56299, where buying could potentially be seen again (tentative buy orders are seen within the support area at 1.56141). The reason why prices could drop this far is because we believe most of the demand to the left has already been consumed – check out the pink trendline, and the demand consumption tails that form it at 1.56781/1.56475/1.56274.
Buy/sell levels:
• Buy orders: 1.57263 [Tentative] (Predicative stop-loss orders seen at: 1.56876) 1.56141 [Tentative] (Predicative stop-loss orders seen at: 1.55634).
• Sell orders: N/A (Predicative stop-loss orders seen at: N/A).
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