Bears attempted to push the price back below 1.5675 support on yesterday’s session. The breakout occurred at high volumes, but they failed to hold below the mark. False breakout of 1.5675 support only “reinforced” this barrier, and the price consolidated above. The longer the consolidation lasts, the bigger is the possibility of the rebound up.
The GBP/USD pair initially fell during the course of the day on Monday, but turned back around and slammed into the 1.58 level. Because of this, we feel that the market will eventually break out to the upside, but we need to clear the 1.58 level in order to start buying.
The GBP/USD pair initially tried to rally during the course of the session on Tuesday, but found the 1.58 level be far too resistive. Because of this, we turned back around and we close to the day looking for support near the 1.5680 handle.
We’ve had an explosive session in the GBP/USD pair during the course of the day on Wednesday, as we slammed into the 1.55 level. The market has been rather positive for quite some time, but as you can see we found so much in the way resistance at the 1.55 level to turn things back around and slice through the 1.55 handle and slam into the uptrend line that has been the very epitome of why this market been going higher lately.
Cable has fallen steeply to the 200-day MA in the 1.5320s, and finding support there, has bounced. On the daily chart it formed a shooting star on Friday – now I expect the bias to be for an extension of the correction. The pair has formed what appears like an incomplete inverted H&S which may lead to a break higher, if the exchange rate rises above the neckline at 1.5442, with a target at 1.5500.
Yesterday’s hike was halted by bumping into a major resistance area. The current patterns suggest a consolidation between 1.552 and 1.56143, today.
Breaching 1.552 will lead it back to 1.55047, which may suggest an inversion.
The daily Pivot Point is around 1.55672. The daily support levels are around 1.55067 and 1.54257. The daily resistance levels are around 1.56482 and 1.57087.
Momentum of the rebound from 1.4565 was relatively weak and the structure is somewhat corrective. Hence, we’d now treat price actions from 1.4565 as developing into a consolidation/correction pattern only. Fall from 1.7190 is viewed as resuming the longer term down trend from 2.1161 and would target 1.3503 and below later.
We note the 13 count on the 60 minute chart and would allow for a rebound into the 1.5390/1.5425 band ahead of further losses. Currently the intraday Elliott wave counts are implying losses to 1.5172 the June low. Failure here will trigger a move to 1.5088, the 61.8% retracement then 1.4895, the 78.6% retracement.
GBP/USD’s fall resumed after break consolidation and took out 1.5164 support. The development also indicates resumption of whole decline from 1.5929. Intraday bias is back on the downside for 61.8% retracement 1.4565 to 1.5929 at 1.5086 first.
In the bigger picture, medium term fall from 1.7190 should have completed at 1.4565. Momentum of the rebound from 1.4565 was relatively weak and the structure is somewhat corrective. Hence, we’d treat price actions from 1.4565 as developing into a consolidation/correction pattern only.
The GBP/USD pair initially tried to rally but then turned back around to form a rather negative candle. Ultimately, this is a market that is simply bouncing around an area that is a lot of noise. If we can break down to a fresh, new low, we would be sellers at that point in time as the GBP/USD pair should reach towards the 1.50 level. On the other hand, if we break higher from here we think that it is probably simply going to be a selling opportunity. A resistant candle above should be an opportunity to pick up “value” in the US dollar.
The GBP/USD pair initially dipped during the course of the week, but found the 1.52 level to be supportive enough to turn the market back around. Ultimately though, this is a market that looks like it is going to consolidate between the 1.52 level and the 1.55 level above, meaning that longer-term traders will probably struggle at this point in time. If we did break down below the bottom of the hammer from the previous week, at that point in time we think that the market could be sold.
The rebound from 1.5106 is still in progress and outlook is unchanged. Intraday bias is mildly on the upside for further rise. But overall, risk will stay on the downside as long as 1.5658 resistance holds. And fall from 1.5929 is in favor to continue. However, break of 1.5658 resistance will invalidate this view and target 1.5929 resistance instead.
I can see two scenarios here – the basic (red) and alternative (blue).
