GBPUSD Rebound Testing First Resistance Barrier Ahead of BoE
- GBPUSD rebound eyes first major resistance
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
- GBPUSD testing resistance confluence into 1.5340
- Breach targets more critical resistance up into 1.5447/50
- Interim support at 1.5237 backed by the weekly open at 1.5187 (bullish invalidation)
- Daily RSI divergence into the lows / pending resistance trigger- Break would be bullish
- Key Event Risk Ahead: Bank of England (BoE) Interest Rate Decisiontomorrow
Notes: Sterling is trading within the confines of a well-defined pitchfork formation off last week’s low with the 9/15 swing low capping today’s advance. A breach above this level targets objectives at 1.5382 & critical resistance up into 1.5447/50 where the 50% retracement converges on the upper median-line parallel.
The focus remains weighted to the topside while above the median-line / 1.5282 with a break below risking a decline towards the lower median-line parallel / 1.5236. A break sub-1.5187 (weekly open) would be needed to put the short-bias back in focus. Bottom line: the long-side is at risk near-term, but we’ll be looking to buy pullbacks while within this formation with a break of the highs targeting the 1.5450 confluence region.
A quarter of the daily average true range (ATR) yields profit targets of 27-30 pips per scalp. Caution is warranted heading into the BoE rate decision with the release likely to fuel added volatility in sterling crosses.
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Relevant Data Releases
Other Setups in Play:
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- Webinar: USD Fails at Resistance- Scalping Sept. Range Ahead of NFP
---Written by Michael Boutros, Currency Strategist with DailyFX
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