Weekly
   •   Last Candlesticks pattern: Long white candlestick
   •   Time of formation: 16 Jan 2017
   •   Trend bias: Down
Daily
   •   Last Candlesticks pattern: Long white candlestick
   •   Time of formation: 18 Apr 2017
   •   Trend bias: Near term up
GBP/USD – 1.2655
Although cable recovered last week, as renewed selling interest emerged around 1.2978 and has dropped sharply, a long black candlestick was formed on the daily chart, suggesting top has been formed at 1.3048 and consolidation below this level would be seen with mild downside bias for test of previous resistance at 1.2616, a daily close below this level would add credence to this view, bring retracement of early upmove to 1.2550, then 1.2500 support but near term oversold condition should limit downside to 1.2440-50 and price should stay well above key support at 1.2365, bring rebound later.
On the upside, whilst initial recovery to 1.2770-80 cannot be ruled out, reckon the Tenkan-Sen (now at 1.2807) would limit upside and bring another decline. A daily close above the Kijun-Sen (now at 1.2842) would defer and risk a stronger rebound to 1.2885-90 but price should falter well below said resistance at 1.2978 and bring another decline later. Only a sustained breach above this level would suggest the correction from 1.3048 top has ended and bring further gain towards this level, a break of this level would revive bullishness and extend recent upmove from 1.1986 low (Jan low) for retracement of early downtrend to 1.3050-60, then 1.3100. having said that, loss of near term upward momentum should prevent sharp move beyond 1.3140-50 (38.2% Fibonacci retracement of 1.5018-1.1986) and reckon 1.3200 would hold.


Recommendation: Sell at 1.2800 for 1.2600 with stop above 1.2900.Â




On the weekly chart, as cable has remained under pressure after forming a black candlestick last week, suggesting further consolidation below recent high of 1.3048 would be seen and mild downside bias is for the retreat from 1.3048 to bring retracement of recent rise to previous resistance at 1.2616, a sustained breach below this level would add credence to this view, bring further weakness to 1.2550-60, however, still reckon downside would be limited and previous support at 1.2515 should remain intact, bring rebound later.
On the upside, expect recovery to be limited to the Tenkan-Sen (now at 1.2782) and renewed selling interest should emerge around 1.2800-10 and price should falter below 1.2870-80, bring another decline. Only above resistance at 1.2978 would signal the retreat from 1.3048 has ended, bring retest of this level first, once this recent high is penetrated, this would signal the erratic upmove from 1.1986 low (2017 low) has resumed, bring retracement of early decline to 1.3090-00, then towards 1.3140-50 (38.2% Fibonacci retracement of 1.5018-1.1986) but price should falter well below 1.3200-10, risk from there is seen for a retreat to take place later. 



