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 – 1.2963
As cable found good support at 1.2774 and has staged a strong rebound, suggesting decline from 1.3269 has formed a temporary low there, hence consolidation with upside bias is seen for gain to the Kijun-Sen (now at 1.3020), however, upside should be limited to 1.3032 resistance and reckon 1.3080 (61.8% Fibonacci retracement of 1.3269-1.2774) would hold, bring retreat later to 1.2900, then 1.2870-75, having said that, said support at 1.2774 should continue to hold and bring another rebound later.
On the upside, whilst initial recovery to the Kijun-Sen (now at 1.3020) cannot be ruled out, reckon upside would be limited to 1.3050-55 and dynamic resistance at 1.3080 (61.8% Fibonacci retracement of 1.3269-1.2774) should hold, bring retreat later. A daily close above 1.3080 would risk a stronger rebound to 1.3120 and possibly towards 1.3165-70, however, we are keeping our view that a temporary top has been formed at 1.3269 earlier this month, reckon upside would be limited to 1.3200 and price should falter well below said resistance, bring another corrective decline later.
Recommendation: Sell at 1.3050 for 1.2850 with stop above 1.3150 or buy at 1.2875 for 1.3020 with stop below 1.2775.
On the weekly chart, as the British pound has rebounded on back of the rally in euro, suggesting first leg of decline from 1.3269 top has ended at 1.2774, hence initial upside bias is seen for the rebound from 1.2774 to extend gain to the Tenkan-Sen (now at 1.3021), however, reckon upside would be limited to 1.3080 (61.8% Fibonacci retracement of 1.3269-1.2774) and price should falter below 1.3165-70, bring another decline later, above there would bring a retest of 1.3269 but only break there would shift risk back to upside and extend early erratic rise from 1.1986 low to 1.3330-40 and later towards 1.3400-10.
On the downside, expect pullback to be limited to 1.2900 and cable should find renewed buying interest at 1.2873, bring another rebound later. Below 1.2800 would bring retest of 1.2774, break there would signal the fall from 1.3269 top is still in progress for retracement of recent upmove to the Kijun-Sen (now at 1.2689), however, reckon downside would be limited to previous support at 1.2589 and bring rebound later. Looking ahead, only a sustained breach below 1.2589 would signal the entire correction from 1.1986 has ended at 1.3269, bring further decline to 1.2500, then towards support at 1.2365.
