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 – 1.3030
Although cable has recovered after finding support at 1.2933 late last week and initial upside risk of a recovery cannot be ruled out, as long as resistance at 1.3126 (this month’s high) holds, consolidation with mild downside bias is seen for another retreat, below said support at 1.2933 would bring weakness to the Kijun-Sen (now at 1.2858) but a daily close below there is needed to signal a temporary top is formed there, bring retracement of recent upmove to 1.2790-00, then towards 1.2730-35, having said that, reckon the lower Kumo (now at 1.2707) would limit downside and price should stay well above support at 1.2589, bring rebound later.
On the upside, expect recovery to be limited to 1.3060-65 and bring another retreat later. Above said resistance at 1.3126 would extend recent erratic upmove from 1.1986 low to 1.3140-45 (38.2% Fibonacci retracement of 1.5018-1.1986), then towards 1.3200, however, reckon upside would be limited to 1.3250-60 and price should falter well below 1.3300, risk from there is seen for a retreat later.
Recommendation: Hold short entered at 1.3040 for 1.2840 with stop above 1.3140
On the weekly chart, although cable rose briefly to as high as 1.3126 earlier this month, price has traded narrowly after retreating from there, suggesting consolidation would be seen with mild downside bias for weakness to 1.2933, break there would bring test of the Tenkan-Sen (now at 1.2858), however, only a break below support at 1.2812 would suggest a temporary top is formed, bring weakness to 1.2755-60, then test of support at 1.2706 but cable needs to penetrate support at 1.2589 to provide confirmation, bring retracement of recent upmove to 1.2550 and possibly towards previous support at 1.2515 which is expected to hold from here.
On the upside, above said resistance at 1.3126 would extend the erratic rise from 1.1986 low (formed back in Jan 2017) is stallion progress and may extend gain to 1.3140-50 (38.2% Fibonacci retracement of 1.5018-1.1986), however, reckon upside would be limited to the upper Kumo (now at 1.3247), the British pound’s upside should falter below 1.3300-10, bring retreat later next month or in late Q3.
