Weekly closing price: 1.3026
The GBP/USD had an absolutely smashing week, netting over 300 pips! This resulted in a near-full-bodied weekly candle being created, which closed within the confines of a weekly printed at 1.3120-1.2957. In the event that the bulls continue to remain dominant, the next area in the firing range is a weekly Quasimodo at 1.3371.
From the , apart from Monday’s session, the bulls printed back-to-back candles throughout the week. This concluded with the unit closing trade within the walls of a marked at 1.3058-1.2979, which is essentially a partner supply to the aforementioned weekly supply. Beyond this barrier, the next base in view will likely be the supply area visible at 1.3278-1.3179 (seen higher on the chart).
H4 support at 1.2971, once again, held steady on Friday, following a selloff from highs of 1.3029. What’s also notable from a technical perspective is that this occurred around the large psychological number 1.30. With the H4 candles seen closing strongly back above 1.30 on Friday, is there a chance that the bulls may continue to lift this market north today/this week? Well, in our opinion, there’s little H4 structure to the left of current price that appears troubling until we reach the H4 mid-level resistance at 1.3050, followed by a Quasimodo at 1.3091 (seen higher on the chart).
Our suggestions: While a long is tempting above the 1.30 boundary given that it is a closely watched number, it is not a position that we’d label high probability considering the higher-timeframe technical landscape we’re in at the moment.
In fact, shorts would probably be the better bet. Here’s why:
• Weekly supply at 1.3120-1.2957.
• Daily supply at 1.3058-1.2979.
• Mid-level H4 resistance at 1.3050/H4 Quasimodo resistance at 1.3091/1.31 psychological number.
For us, the best trade would be a short from the above noted H4 Quasimodo . Not only do we have the option of then placing stops ABOVE the said weekly supply, but we, alongside the bigger players, can use these stops taken from above the noted daily supply as liquidity i.e. looking to take advantage of a possible fakeout. Remember, stops above supplies are buy orders, and are thus liquidity for sellers!
Data points to consider: UK manufacturing PMI at 9.30am. US ISM manufacturing PMI at 3pm GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.3091 (stop loss: 1.3122).