Over the course of Tuesday’s sessions, the British pound advanced against its US rival to weekly highs of 1.3193. Following a near-pip-perfect response off its 1.31 handle on the H4 timeframe amid early London hours, the pair forced through Monday’s high of 1.3166 and touched gloves with July’s opening level positioned at 1.3183.
Traders may also want to acknowledge the potential H4 AB=CD formation in view that completes a few pips above the 1.32 handle (black arrows). Note the approach terminates within striking distance of a 61.8% Fib resistance value at 1.3207 and a H4 Quasimodo resistance level plotted at 1.3215.
Against the backdrop of intraday flow, the daily timeframe exhibits potential to press as far south as trend line support (etched from the low 1.2661), and as high as a Quasimodo resistance at 1.3315. In terms of the weekly timeframe, support rests at 1.3047 and supply enters the fray around the 1.3472-1.3295 region.
Areas of consideration:
With direction on the high timeframes lacking in terms of notable structure at the moment, focus is drawn to 1.3215/1.32 on the H4 timeframe this morning (red zone). As stated above, the area is a combination of a Quasimodo resistance level, a key Fibonacci ratio, a round number and a potentially strong AB=CD approach.
Given 1.3215/1.32 is somewhat small, waiting for a H4 bearish candlestick formation to confirm the zone may be an idea before pulling the trigger. This will help avoid falling victim to a fakeout. Ultimately, the risk/reward from this base is attractive, with the first take-profit target set around August’s opening level at 1.3116.
Today’s data points: FOMC rate decision and press conference.
Traders may also want to acknowledge the potential H4 AB=CD formation in view that completes a few pips above the 1.32 handle (black arrows). Note the approach terminates within striking distance of a 61.8% Fib resistance value at 1.3207 and a H4 Quasimodo resistance level plotted at 1.3215.
Against the backdrop of intraday flow, the daily timeframe exhibits potential to press as far south as trend line support (etched from the low 1.2661), and as high as a Quasimodo resistance at 1.3315. In terms of the weekly timeframe, support rests at 1.3047 and supply enters the fray around the 1.3472-1.3295 region.
Areas of consideration:
With direction on the high timeframes lacking in terms of notable structure at the moment, focus is drawn to 1.3215/1.32 on the H4 timeframe this morning (red zone). As stated above, the area is a combination of a Quasimodo resistance level, a key Fibonacci ratio, a round number and a potentially strong AB=CD approach.
Given 1.3215/1.32 is somewhat small, waiting for a H4 bearish candlestick formation to confirm the zone may be an idea before pulling the trigger. This will help avoid falling victim to a fakeout. Ultimately, the risk/reward from this base is attractive, with the first take-profit target set around August’s opening level at 1.3116.
Today’s data points: FOMC rate decision and press conference.
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