1.35 looks reasonable for a sell?
The British pound delivered a strong performance on Thursday on the back of recent developments surrounding the ‘Brexit’ situation. According to Reuters, Britain and Ireland are very close to reaching a border deal after the British PM delivered an updated offer in a bid to solve the current border dispute.
Several H4 tech resistances were consumed as a result of yesterday’s rally. The latest resistance to feel the chop was the H4 mid-level point at 1.3450, which, as you can see, placed the 1.35 handle back in the spotlight along with the H4 channel resistance extended from the high 1.3229. The move higher was also likely bolstered by daily support at 1.3371. Traders may also want to note that on this timeframe, the recent move higher chalked up a nice-looking daily bullish engulfing candle which shows room to extend up to as far north as the daily Quasimodo resistance at 1.3618. The flip side to this, of course, is that weekly price is seen digging lower after shaking hands with a weekly channel resistance taken from the high 1.2673.
Direction:
• Long: Buying is appealing on the daily timeframe, but chancy on both H4 and weekly timeframes as you would effectively be entering long into a weekly channel resistance and a round number (H4) that boasts convergence from a H4 channel resistance. Not really the best of odds!
• Short: A sell, according to structure, seems most logical. Selling 1.35 with stops planted above the 30th November high 1.3540 (H4) could be something to consider. This would give the trade room to breathe should H4 price decide to fake above 1.35 to collect stop-loss orders. The first take-profit target from this region could be the 1.3450 neighborhood.
Data points to consider: UK manufacturing production m/m and Goods trade balance at 9.30am; US employment figures at 1.30pm; US prelim UoM consumer sentiment at 3pm GMT.
Several H4 tech resistances were consumed as a result of yesterday’s rally. The latest resistance to feel the chop was the H4 mid-level point at 1.3450, which, as you can see, placed the 1.35 handle back in the spotlight along with the H4 channel resistance extended from the high 1.3229. The move higher was also likely bolstered by daily support at 1.3371. Traders may also want to note that on this timeframe, the recent move higher chalked up a nice-looking daily bullish engulfing candle which shows room to extend up to as far north as the daily Quasimodo resistance at 1.3618. The flip side to this, of course, is that weekly price is seen digging lower after shaking hands with a weekly channel resistance taken from the high 1.2673.
Direction:
• Long: Buying is appealing on the daily timeframe, but chancy on both H4 and weekly timeframes as you would effectively be entering long into a weekly channel resistance and a round number (H4) that boasts convergence from a H4 channel resistance. Not really the best of odds!
• Short: A sell, according to structure, seems most logical. Selling 1.35 with stops planted above the 30th November high 1.3540 (H4) could be something to consider. This would give the trade room to breathe should H4 price decide to fake above 1.35 to collect stop-loss orders. The first take-profit target from this region could be the 1.3450 neighborhood.
Data points to consider: UK manufacturing production m/m and Goods trade balance at 9.30am; US employment figures at 1.30pm; US prelim UoM consumer sentiment at 3pm GMT.
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