Weekly
• Last Candlesticks pattern: Shooting star
• Time of formation: 5 Sep 2016
• Trend bias: Down
Daily
• Last Candlesticks pattern: Long black candlestick
• Time of formation: 24 Jun 2016
• Trend bias: Down
GBP/USD – 1.2583
The British pound has risen again after brief pullback and upside bias remains for the rise from 1.2109 to extend further gain to 1.2640-50, however, as broad outlook remains consolidative, reckon upside would be limited and price should falter well below indicated previous resistance at 1.2706, bring retreat later. In the event cable is able to penetrate resistance at 1.2706, this would retain bullishness and extend the erratic rise from 1.1986 low towards another previous resistance at 1.2775 first.
On the downside, whilst initial pullback to 1.2490-00 cannot be ruled out, reckon the Tenkan-Sen (now at 1.2429) would limit downside and bring another rise later to aforesaid upside target. Below the Kijun-Sen (now at 1.2363) would suggest top is possibly formed, bring test of support at 1.2335 but a daily close below said support at 1.2335 is needed to confirm and suggest the rebound from 1.2109 has ended instead, risk weakness to 1.2240-45 and possibly towards 1.2200, however, price should stay well above said support at 1.2109 (this month’s low), bring rebound later.
Recommendation: Buy at 1.2470 for 1.2670 with stop below 1.2370.
On the weekly chart, cable has continued moving higher after staging a strong rebound from 1.2109, adding credence to our bullish view that another leg of corrective rise from 1.1986 low is underway and may extend gain to 1.2706 resistance but break there is needed to provide confirmation, bring retracement of early downtrend for test of previous resistance at 1.2775 and later 1.2850-60 but price should falter well below psychological resistance at 1.3000.
On the downside, expect pullback to be limited to 1.2465-70 and renewed buying interest should emerge around there, bring another rise later to aforesaid upside targets. Only below support at 1.2335 would abort and prolong choppy trading within recent established broad range, bring further fall to 1.2240-50 but a weekly close below the Kijun-Sen (now at 1.2212) is needed to signal the rebound from 1.2109 has ended, bring further fall to 1.2140-50.
