GBP/USD headed for higher ground???
As news broke the UK and the EU agreed a draft text setting out a close post-Brexit relationship, the British pound soared against its US counterpart. European Council President Tusk said the text has been agreed at the negotiators level and agreed in principle at political level, subject to the endorsement of the leaders’ ahead of Sunday's summit.
In the shape of a H4 ABCD (black arrows) bearish formation, the pair cleared 1.28 and only lost momentum through 1.29 after connecting with the chart’s ABCD 127.2% bearish point at 1.2924. According to the H4 timeframe, Downside targets from the recently completed ABCD formation fall in at the 38.2% Fib support drawn from 1.2850 and the 61.8% Fib support at 1.2803. Both targets have already been hit, and therefore could signify we’re likely heading for ground above 1.29 today, possibly targeting the 61.8% Fib resistance value at 1.2941.
On a wider perspective, higher-timeframe structure remains unchanged:
Weekly price, as highlighted in previous reports, remains limited to a consolidation carved from demand at 1.2589-1.2814 and a supply drawn from 1.3472-1.3204 (price is currently testing the lower edge of this range). A closer look at price action on the daily timeframe, nevertheless, shows the unit positioned within close proximity to the 1.2695 Oct 30 low. While a response from this neighbourhood is possible, the Quasimodo support seen at 1.2635 remains an appealing level, given the amount of stop-loss orders likely positioned beneath the said low and the 1.2661 Aug 15 low (taking out these stops provide liquidity for pro money to buy), along with a possible ABCD approach (red arrows) terminating just south at 1.2614.
Areas of consideration:
With the political picture essentially pointing to more of a bullish GBP, along with the weekly chart showing the pair testing demand and H4 action poised to possibly breach 1.29, further upside is likely in store.
Ultimately, before pressing the buy button, traders are urged to wait for the 61.8% H4 Fib resistance value at 1.2941 to be taken out. With this level out of the picture, followed by a retest of 1.29 as support (preferably in the shape of a bullish candlestick pattern – entry/stop parameters can be defined according to this configuration), a long targeting 1.30 would be in the offing.
Today’s data points: Limited.
In the shape of a H4 ABCD (black arrows) bearish formation, the pair cleared 1.28 and only lost momentum through 1.29 after connecting with the chart’s ABCD 127.2% bearish point at 1.2924. According to the H4 timeframe, Downside targets from the recently completed ABCD formation fall in at the 38.2% Fib support drawn from 1.2850 and the 61.8% Fib support at 1.2803. Both targets have already been hit, and therefore could signify we’re likely heading for ground above 1.29 today, possibly targeting the 61.8% Fib resistance value at 1.2941.
On a wider perspective, higher-timeframe structure remains unchanged:
Weekly price, as highlighted in previous reports, remains limited to a consolidation carved from demand at 1.2589-1.2814 and a supply drawn from 1.3472-1.3204 (price is currently testing the lower edge of this range). A closer look at price action on the daily timeframe, nevertheless, shows the unit positioned within close proximity to the 1.2695 Oct 30 low. While a response from this neighbourhood is possible, the Quasimodo support seen at 1.2635 remains an appealing level, given the amount of stop-loss orders likely positioned beneath the said low and the 1.2661 Aug 15 low (taking out these stops provide liquidity for pro money to buy), along with a possible ABCD approach (red arrows) terminating just south at 1.2614.
Areas of consideration:
With the political picture essentially pointing to more of a bullish GBP, along with the weekly chart showing the pair testing demand and H4 action poised to possibly breach 1.29, further upside is likely in store.
Ultimately, before pressing the buy button, traders are urged to wait for the 61.8% H4 Fib resistance value at 1.2941 to be taken out. With this level out of the picture, followed by a retest of 1.29 as support (preferably in the shape of a bullish candlestick pattern – entry/stop parameters can be defined according to this configuration), a long targeting 1.30 would be in the offing.
Today’s data points: Limited.
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