(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Though under pressure, support at 1.1904/1.2235 remains in motion in May. Neighbouring resistance, should we see an attempt at recovery, can be found in the form of a trendline (1.7191). A violation of support, nevertheless, puts forward a 127.2% Fib ext. level at 1.1297.
Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.
Daily timeframe:
Partially altered from previous analysis -
A few pips south of supply at 1.2649/1.2799 (prior demand), a double-top pattern formed at 1.2647, with May 13 consuming the neckline (April 21 1.2247) and establishing a potential take-profit target (purple) around 1.1855.
In recent sessions, the double-top neckline at 1.2247 held as resistance – that was until yesterday’s 1.2% advance. However, recent buying does not imply the double-top pattern will fail; what it does mean, though, traders are able to sell this market at a better price, as protective stop-loss orders are generally positioned above pattern peaks: 1.2647.
H4 timeframe:
According to the H4 chart, price action has been grinding channel support (1.2642 – prior resistance) since topping last Tuesday at 1.2296. Yesterday, nonetheless, gathered traction to the upside, producing what appears to be the D-leg of an ABCD bearish configuration (orange) at 1.2389.
Above the ABCD completion, trendline resistance (prior support – 1.2163) is seen uniting with supply at 1.2477/1.2438.
H1 timeframe:
Amid a sharp slump in the USD Tuesday, sterling found itself testing highs at 1.2362, brushing aside a number of key technical resistances on the H1 timeframe and hauling the RSI indicator into overbought waters.
Supply at 1.2373/1.2345 put a cap on gains as we headed into US trade, an area that could force a retest at 1.23. Still, a whipsaw through the round number is in the offing, knowing demand (prior supply) at 1.2295/1.2266 resides close by.
Structures of Interest:
Monthly price holds 1.1904/1.2235, despite positioned against the major trend.
Sellers on the daily timeframe appear fragile right now, in spite of the recent double-top resistance forming at 1.2647.
H4 price has eyes on 1.2390ish – the ABCD completion – as possible resistance.
H1 price is testing supply at 1.2373/1.2345. A whipsaw through this area to 1.24 is a possibility, which happens to align nearby the H4 ABCD correction. This scenario may appeal to intraday sellers. However, do be aware we are coming off monthly support.
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