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!
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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
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---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.