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GBPUSD Outside Day Reversal Clears Range- Short Scalps Favored

GBPUSD Outside Day Reversal Clears Range- Short Scalps Favored

Michael Boutros, Strategist

Talking Points

GBPUSD Daily

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPUSD posts outside day reversal candle / false break above upper MLP
  • Reversal takes out weekly opening range low / breaks below January median line- bearish
  • Key support at highlighted region into 1.5359
  • Resistance at 1.5673 backed by bearish invalidation at 1.57 & 1.5773
  • Daily RSI break sub 50- bearish
  • Event Risk Ahead: UK 2Q Advanced GDP & FOMC next week

GBPUSD 30min

Notes: An outside day reversal candle in the Sterling has broken below the weekly opening range low and shifts the focus to the short side of the pound. Note that price has also now broken back below the median-line extending off the January low with daily RSI also breaking below the 50-threhsold (bearish near-term). Interim support rests at 1.5502 with subsequent objectives eyed at 1.5462, 1.5420 & the July low-day close (LDC) at 1.5359.

Interim resistance stands at 1.5543 backed by our near-term bearish invalidation level upper MLP / 1.5582. A breach above the 1.57-handle would be needed to put the long-side back into focus with such a scenario eyeing the May HDC at 1.5774. A quarter of the daily average true range yields profit targets of 28-30pips per scalp. Event risk on the pair is limited until next week with release of UK 2Q GDP figures & the FOMC policy meeting likely to fuel added volatility in their respective crosses.

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Relevant Data Releases

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex,contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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