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!
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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