Outlook for the GBP this morning...
Coming in from the top this morning, we can see that weekly price continues to paint a bearish image from the weekly channel resistance extended from the high 1.2673. According to the daily timeframe, further selling is likely to be seen up until the candles shake hands with a nearby broken daily Quasimodo support at 1.3279, which is positioned directly above a daily trendline support taken from the low 1.2108.
Across on the H4 timeframe, the pair retested the underside of October’s opening level at 1.3367/H4 channel support-turned resistance taken from the low 1.3061 (a highlighted setup in Tuesday’s outlook), and tumbled lower. This would have been a tricky move to sell since price connected with these levels following better-than-expected UK inflation numbers!
Direction:
• Long: The pair concluded the day bottoming just ahead of the 1.33 handle/November’s opening level at 1.3290 (H4 timeframe). For that reason, these levels are likely under the spotlight for many traders this morning. With that said, however, it might be worth noting that a potential fakeout through these levels is a possibility, as directly below we have the aforementioned daily broken Quasimodo level. Adding to this, we also have selling pressure from the weekly timeframe to contend with. Therefore, trading long from the 1.33 region is not a trade that’s considered high probability.
• Short: Despite weekly price trading from a concrete resistance, selling this market is a minefield. Besides the current H4 supports in view, just beyond that, as highlighted above, we have a daily support! As you can see, this is not really ideal selling conditions!
Data points to consider: UK employment figures at 9.30am; US CPI figures at 1.30pm; FOMC interest-rate decision, economic projections and statement at 7pm; FOMC press conference at 7.30pm; FOMC member Brainard speaks at 11pm GMT.
Areas worthy of attention:
Supports: 1.33 handle; 1.3290; 1.3279; daily trendline support taken from the low 1.2108.
Resistances: 1.3367; 1.3371; weekly channel resistance taken from the high 1.2673; H4 channel support-turned resistance extended from the low 1.3061.
Across on the H4 timeframe, the pair retested the underside of October’s opening level at 1.3367/H4 channel support-turned resistance taken from the low 1.3061 (a highlighted setup in Tuesday’s outlook), and tumbled lower. This would have been a tricky move to sell since price connected with these levels following better-than-expected UK inflation numbers!
Direction:
• Long: The pair concluded the day bottoming just ahead of the 1.33 handle/November’s opening level at 1.3290 (H4 timeframe). For that reason, these levels are likely under the spotlight for many traders this morning. With that said, however, it might be worth noting that a potential fakeout through these levels is a possibility, as directly below we have the aforementioned daily broken Quasimodo level. Adding to this, we also have selling pressure from the weekly timeframe to contend with. Therefore, trading long from the 1.33 region is not a trade that’s considered high probability.
• Short: Despite weekly price trading from a concrete resistance, selling this market is a minefield. Besides the current H4 supports in view, just beyond that, as highlighted above, we have a daily support! As you can see, this is not really ideal selling conditions!
Data points to consider: UK employment figures at 9.30am; US CPI figures at 1.30pm; FOMC interest-rate decision, economic projections and statement at 7pm; FOMC press conference at 7.30pm; FOMC member Brainard speaks at 11pm GMT.
Areas worthy of attention:
Supports: 1.33 handle; 1.3290; 1.3279; daily trendline support taken from the low 1.2108.
Resistances: 1.3367; 1.3371; weekly channel resistance taken from the high 1.2673; H4 channel support-turned resistance extended from the low 1.3061.
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