Well done to those who shorted 1.27 - monster trade!
For those who read our previous report on the GBP you may remember that we highlighted the 1.27 region as a potential level to sell from, given its surrounding confluence (H4 Quasimodo resistance at 1.2699 and housed within a daily supply at 1.2728-1.2657, as well as positioned only 25 or so pips above the weekly Quasimodo resistance at 1.2673). Helped by the BoE signaling that interest-rate hikes may not be seen for a while the unit reacted from this angle almost to-the-pip, consequently snapping a two day bullish phase and ending the day forming a bearish engulfing candle. Well done to any of our readers who managed to lock in a position here!!!
As of current prices, the H4 candles recently shook hands with a H4 support area drawn from 1.2490-1.2531, which is positioned around the top edge of a daily support area at 1.2510-1.2415, and also houses both the 1.25 hurdle and December’s opening base at 1.2514. While this zone looks prime to support a rotation to the upside today, our only concern is that the weekly chart indicates that there’s room for sterling to move lower down to weekly support coming in at 1.2329.
Our suggestions: With the weekly signaling that further selling could be on the cards, our team has come to a consensus that the current H4 support area will only be considered a valid buy zone if, and only if, we see a reasonably sized bullish candle form that closes above the H4 mid-way resistance level at 1.2550.
Data points to consider: UK services PMI at 9.30am. US employment report at 1.30pm, FOMC member Evans speaks at 2.15pm and the US ISM non-manufacturing reading can be viewed at 3pm GMT.
As of current prices, the H4 candles recently shook hands with a H4 support area drawn from 1.2490-1.2531, which is positioned around the top edge of a daily support area at 1.2510-1.2415, and also houses both the 1.25 hurdle and December’s opening base at 1.2514. While this zone looks prime to support a rotation to the upside today, our only concern is that the weekly chart indicates that there’s room for sterling to move lower down to weekly support coming in at 1.2329.
Our suggestions: With the weekly signaling that further selling could be on the cards, our team has come to a consensus that the current H4 support area will only be considered a valid buy zone if, and only if, we see a reasonably sized bullish candle form that closes above the H4 mid-way resistance level at 1.2550.
Data points to consider: UK services PMI at 9.30am. US employment report at 1.30pm, FOMC member Evans speaks at 2.15pm and the US ISM non-manufacturing reading can be viewed at 3pm GMT.
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