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 – 1.2945
Cable’s rise from 1.2589 turned out to be much stronger than expected, suggesting the correction from 1.3048 has ended there and consolidation with upside bias is seen for a retest of said resistance, however, break there is needed to retain bullishness and signal recent erratic upmove from 1.1986 low has resumed and extend gain to 1.3100, then 1.3140-45 (38.2% Fibonacci retracement of 1.5018-1.1986), however, reckon upside would be limited to 1.3200-10 and price should falter well below 1.3300, risk from there is seen for a retreat later.
On the downside, whilst initial pullback to the Tenkan-Sen (now at 1.2842) cannot be ruled out, reckon downside should be limited to the Kijun-Sen (now at 1.2810) and 1.2760 (previous minor resistance) should hold, bring another rise later. Below 1.2700-10 would abort and prolong consolidation, risk weakness to 1.2650 and possibly towards 1.2600 but said support at 1.2589 should remain intact, bring rebound later. Only a drop below 1.2589 would signal recent decline from 1.3048 top has resumed and extend fall to 1.2550, then 1.2500 support but price should stay well above key support at 1.2365, bring rebound later.
Recommendation: Stand aside for this week
On the weekly chart, last week’s stronger-than-expected rebound formed a long white candlestick, signaling the pullback from 1.3048 has ended and break there would extend recent rise from 1.1986 low (2017 low) for retracement of early decline to 1.3090-00, then towards 1.3140-50 (38.2% Fibonacci retracement of 1.5018-1.1986) but reckon upside would be limited to 1.3200-10 and price should falter below 1.3300, bring retreat later this month.
On the downside, expect pullback to be limited to 1.2850-60 and the Tenkan-Sen (now at 1.2819) should hold, bring another rise later. A drop below 1.2760 would suggest the rebound from 1.2589 has ended instead and prolong choppy trading, bring weakness to 1.2640-50 but said support at 1.2589 should remain intact. Only a break of said support at 1.2589 would signal the fall from 1.3048 top is still in progress for correction of early upmove to 1.2550, however, still reckon downside would be limited and previous support at 1.2515 should remain intact, price should stay well above previous support at 1.2365, bring rebound later.
