GBP/USD Reversal Approaching Initial Support Targets
- GBPUSD reversal approaching initial support targets
- Move lower to offer long-entries
- Updated targets & invalidation levels
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: We’ve been tracking this Cable setup since the start of the week on SB Trade Desk with an impressive outside-day reversal off the 2016 open / median-line resistance yesterday shifting the focus lower. The reversal is now approaching some areas of interest for possible support at the March high-day close at 1.4472. A break here keeps the downside bias in play targeting 1.4347/58 with the broader bullish invalidation level set just below at the ascending lower median-line parallel. Note that daily momentum has failed at 60 with a pending support trigger extending off the lows now in play.
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Notes: A break of an ascending median-line formation alongside a move below the weekly open reinforced the near-term reversal with the decline now testing interim support. Immediate focus remains lower sub-1.4580/88 (weekly open / February high-day close). Near-term momentum divergence suggests we may be vulnerable for a rebound here but we’ll be looking to sell rallies / support triggers with a break lower targeting 1.4415 & 1.4347/58.
Keep in mind ulitamately we would be looking to buy a dip ahead of our bullish invalidation level at the lower median-line parallel / 1.4296-1.4305. Added caution is warranted heading into U.K. PMI data tomorrow & U.S. Non-Farm Payrolls on Friday with the releases likely to fuel increased volatility in their respective crosses. A quarter of the daily average true range (ATR) yields profit targets of 31-34 pips per scalp. 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:
- NZD/USD Fails at 2016 High Ahead of Labor Report- Bearish Sub 7025
- USD/CAD Outside Day Reversal Off Key Support- Long Scalps in Play
- AUD/USD Scalp Targets Ahead of RBA- Watch 7590
- USDOLLAR at Critical Inflection Point Heading Into May Open, NFPs
---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.