GBP/USD 1.4175 is Near-Term Bull/Bear Dividing Line
- GBPUSD testing slope support- Immediate short-bias at risk above 1.40
- Breach above 1.4175 needed to validate near-term reversal
- Updated targets & invalidation levels
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: Sterling is testing down-slope support at the median-line extending off the May high around ~1.4050 with the immediate short-bias now at risk while above yesterday’s low (1.4004). Note that daily momentum is also eyeing a support trigger extending off the January low and an accompanied break in price is needed to validate resumption of the broader downtrend.
That said, a breach above 1.4175 shifts the near-term focus higher targeting the monthly open / the 50-line at 1.4358 backed by the 78.6% retracement at 1.4490 & the 200-day moving average at 1.4525. A break lower targets critical support at 1.3911/21 – a region defined by the 2016 low-day close & the 88.6% retracement of the advance off the 2009 low.
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Notes: A strong rebound just ahead of confluence Fibonacci support at 1.3995-1.40 backed by a resistance trigger break shifts the near-term focus higher. That said, note that intraday RSI has been unable to clear the 60-threshold - we’ll be looking for this to change in the event of the breakout with a move surpassing 1.4175 needed to validate our near-term bullish scalp bias. Such a scenario targets topside resistance objectives at 1.4230 backeed by hthe 61.8% retracement at 1.4293 & 1.4349. Note that the monthly open comes in just higher at 1.4357.
A break of the lows keeps the broader short-bias in play targeting the 2016 low-day close at 1.3911/21 backed by 1.3834 & the 2009 low-day close at 1.3804. A quareter of the daily average tru range (ATR) yields profit targets of 36-39 pips per scalp. UK industrial & manufactuing production numbers are slated for tomorrow with more significant event risk on tap next week. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!
Check out SSI to see how retail crowds are positioned as well as open interest heading into the close of the week.
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Relevant Data Releases
Other Setups in Play:
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- CAD/JPY Reversal Approaching Initial Support - Bearish Sub-86.53
- AUD/USD Into Support Ahead of RBA Interest Rate Decision
- Webinar: Start of Month, Quarter Yields Fresh Scalp Opportunities
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---Written by Michael Boutros, Currency Strategist with DailyFX
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