GBP short closed ahead of the daily support area...
Weekly gain/loss: - 98 pips
Weekly closing price: 1.3033
Despite weekly price violently piercing through the top edge of a weekly supply at 1.3120-1.2957, last week’s action concluded by chalking up a strong-looking selling wick that managed to firmly close back within the walls of the noted supply. Providing that the bears continue to dominate here, this would likely place the weekly demand at 1.2589-1.2759 back in view.
Daily supply at 1.3278-1.3179, as you can see, managed to hold firm and send the candles south last week. Why were we banging the drum for this zone so much over the past week? Well, not only was the supply a strong-looking base, it also boasted a daily trendline resistance taken from the high 1.3477, a daily channel resistance drawn from the high 1.2903 and two converging daily AB=CD (green/orange arrows) 127.2 Fib extensions at 1.3222/1.3223 (taken from the lows 1.2811/1.2365). Also, for you RSI fans, there was daily divergence in motion, as well.
Those who follow our reports on a regular basis may recall that our team entered into a short position from 1.3209, with conservative stops planted above the aforementioned daily supply at 1.3280. With the BoE keeping its monetary policy unchanged on Thursday as well as Friday’s US job’s report coming in stronger than expected, we witnessed two consecutive bearish days. As a result, the daily support area at 1.3058-1.2979 was tested going into the week’s end. Initially, we were only going to take partial profits around the 1.3050 neighborhood, but instead decided to liquidate the position here for a little over two times our risk, ending the week on a high.
Our suggestions: Moving forward, H4 price ended the week closing in the shape of an indecision candle just ahead of an interesting (green) buy zone. Comprised of July’s opening level at 1.3003, the large psychological boundary at 1.30, an AB=CD (black arrows) 161.8% Fib ext. at 1.3019, a 78.6% Fib retracement at 1.3004 and also being encased within the said daily support area, this H4 zone, in our humble view, has the potential to bounce price today.
Our only concern, of course, is the fact that weekly price is trading from supply (see above). For that reason, you may want to consider waiting for additional H4 candle confirmation i.e. a full, or near-full bullish rotation candle, before pulling the trigger.
Data points to consider: FOMC member Kaskari takes the stage at 6.25pm GMT+1.
Levels to watch/live orders:
• Buys: 1.30/1.3019 (waiting for a H4 bullish candle to form, preferably a full-bodied candle, before committing to a trade is advised, stop loss: ideally beyond the candle’s tail).
• Sells: Flat (stop loss: N/A).
Weekly closing price: 1.3033
Despite weekly price violently piercing through the top edge of a weekly supply at 1.3120-1.2957, last week’s action concluded by chalking up a strong-looking selling wick that managed to firmly close back within the walls of the noted supply. Providing that the bears continue to dominate here, this would likely place the weekly demand at 1.2589-1.2759 back in view.
Daily supply at 1.3278-1.3179, as you can see, managed to hold firm and send the candles south last week. Why were we banging the drum for this zone so much over the past week? Well, not only was the supply a strong-looking base, it also boasted a daily trendline resistance taken from the high 1.3477, a daily channel resistance drawn from the high 1.2903 and two converging daily AB=CD (green/orange arrows) 127.2 Fib extensions at 1.3222/1.3223 (taken from the lows 1.2811/1.2365). Also, for you RSI fans, there was daily divergence in motion, as well.
Those who follow our reports on a regular basis may recall that our team entered into a short position from 1.3209, with conservative stops planted above the aforementioned daily supply at 1.3280. With the BoE keeping its monetary policy unchanged on Thursday as well as Friday’s US job’s report coming in stronger than expected, we witnessed two consecutive bearish days. As a result, the daily support area at 1.3058-1.2979 was tested going into the week’s end. Initially, we were only going to take partial profits around the 1.3050 neighborhood, but instead decided to liquidate the position here for a little over two times our risk, ending the week on a high.
Our suggestions: Moving forward, H4 price ended the week closing in the shape of an indecision candle just ahead of an interesting (green) buy zone. Comprised of July’s opening level at 1.3003, the large psychological boundary at 1.30, an AB=CD (black arrows) 161.8% Fib ext. at 1.3019, a 78.6% Fib retracement at 1.3004 and also being encased within the said daily support area, this H4 zone, in our humble view, has the potential to bounce price today.
Our only concern, of course, is the fact that weekly price is trading from supply (see above). For that reason, you may want to consider waiting for additional H4 candle confirmation i.e. a full, or near-full bullish rotation candle, before pulling the trigger.
Data points to consider: FOMC member Kaskari takes the stage at 6.25pm GMT+1.
Levels to watch/live orders:
• Buys: 1.30/1.3019 (waiting for a H4 bullish candle to form, preferably a full-bodied candle, before committing to a trade is advised, stop loss: ideally beyond the candle’s tail).
• Sells: Flat (stop loss: N/A).
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