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 – 1.2906
Although cable has continued moving higher after last week’s gap-up opening and bullishness remains for the erratic rise from 1.1986 low (Jan low) to bring retracement of early downtrend to 1.3000 psychological resistance, loss of near term upward momentum should prevent sharp move beyond 1.3090-00 and reckon 1.3140-50 (38.2% Fibonacci retracement of 1.5018-1.1986) would hold on first testing, risk from there is seen for a retreat to take place later.
On the downside, whilst initial pullback to 1..2860-65 and possibly support at 1.2757 is likely, reckon downside would be limited to 1.2700-10 and bring another rise later to aforesaid upside targets. A daily close below the Kijun-Sen (now at 1.2665) would suggest top is possibly formed instead, risk correction to previous resistance at 1.2616 but downside should be limited to 1.2575 and price should stay well above 1.2500, bring another rally later.
Recommendation: Buy at 1.2710 for 1.2910 with stop below 1.2610.
On the weekly chart, as cable has maintained a firm undertone after recent rally above resistance at 1.2775, adding credence to our bullish view that the erratic rise from this year’s low at 1.1986 has resumed and near term upside bias remains for this rise to bring retracement of early decline and gain to psychological resistance at 1.3000, however, reckon upside would be limited to 1.3090-00 and price should falter well below 1.3140-50 (38.2% Fibonacci retracement of 1.5018-1.1986), bring retreat later.
On the downside, although initial pullback to 1.2850 and 1.2800 cannot be ruled out, reckon downside would be limited to another previous resistance at 1.2706 and bring another rise later. Below 1.2640-50 would risk test of previous resistance at 1.2616, break there would defer and suggest top is possibly formed, bring weakness to 1.2550-60 but last week’s low at 1.2515 should hold, bring another rise later. Only a drop below 1.2500 would abort and signal top is formed instead, then test of the Kijun-Sen (now at 1.2476) would follow but support at 1.2365 should remain intact.
