1.24/1.2440 is an interesting area of confluence!
The bearish pulse continues to beat in the GBP/USD market this morning. Sterling came under pressure shortly after Sunday’s open, falling sharply from a H4 supply zone at 1.2611-1.2589. Several H4 tech supports were engulfed during this downward move, including the H4 demand at 1.2490-1.2531 which is currently being retested as supply. On the condition that this base holds firm, the next H4 support target on the horizon comes in at 1.2427: an interesting H4 level. It’s interesting because not only does it fuse beautifully with a H4 AB=CD 161.8% Fib ext., the 1.24 handle and a H4 trendline support taken from the high 1.2432, but it also has additional backing from a daily support area chiseled in at 1.2510-1.2415.
The only grumble we have here is that weekly price is currently selling off from a weekly Quasimodo resistance level at 1.2673, and shows that the next support on tap is 1.2329: the 2017 yearly opening level which converges with the daily demand seen BELOW the current daily support area! Therefore, a bounce is all that should be expected from the above noted H4 supports.
Our suggestions: Supposing that price strikes the 1.24/1.2440 region today (the yellow box), our desk has noted that a buy would only be considered valid if, and only if, a reasonably sized H4 bull candle takes shape from here. The first take-profit target will likely be the 1.25 neighborhood, which is also where we’d strongly advise traders to reduce risk to breakeven.
Data points to consider: US CB Consumer confidence report at 3pm GMT.
The only grumble we have here is that weekly price is currently selling off from a weekly Quasimodo resistance level at 1.2673, and shows that the next support on tap is 1.2329: the 2017 yearly opening level which converges with the daily demand seen BELOW the current daily support area! Therefore, a bounce is all that should be expected from the above noted H4 supports.
Our suggestions: Supposing that price strikes the 1.24/1.2440 region today (the yellow box), our desk has noted that a buy would only be considered valid if, and only if, a reasonably sized H4 bull candle takes shape from here. The first take-profit target will likely be the 1.25 neighborhood, which is also where we’d strongly advise traders to reduce risk to breakeven.
Data points to consider: US CB Consumer confidence report at 3pm GMT.
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