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- GBP/USD Carves monthly opening range below 2017 highs
- Check out our New British Pound quarterly projections in our Free DailyFX Trading Forecasts
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GBP/USD Daily Chart
Technical Outlook: The British Pound has carved out its monthly opening-range just below the 2017 high close at 1.3589 with interim support eyed at the 2018 high-day close at 1.3495. As discussed in this week’s Technical Perspective, seasonal tendencies are pretty heavy for Cable with the daily momentum profile also looking a bit vulnerable here. Ultimately, we’re looking for a break of this range to validate our near-term outlook with the broader bias still weighted to the topside while within this multi-year ascending pitchfork formation / 1.3320.
GBP/USD 240min Chart
Notes: A closer look at price action highlights a proposed pitchfork extending off the highs with price rebounding off the 50-line earlier today. We’ll favor fading strength while below the weekly open at 1.3575 with a break below 1.3456 shifting the focus towards confluence support at the median-line / 38.2% retracement at 1.3389.
A breach of the objective weekly opening-range highs / 1.3589 would keep the broader long-bias in play with such a scenario targeting subsequent resistance objectives at the 2017 high at 1.3658 and the Brexit gap at 1.3675. Bottom line: the risk is lower in sterling but ultimately a larger setback would offer more favorable long-entries while within the broader uptrend. Look for a break / close of the monthly opening-range to get things going.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis mini-series
- A summary of IG Client Sentimentshows traders are net-short GBPUSD- the ratio stands at -1.52 (39.6% of traders are long) – weak bullishreading
- Retail has remained net-short since Dec 28; price has moved 1.1% higher since then
- Long positions are 3.1% lower than yesterday and 0.2% higher from last week
- Short positions are 10.1% lower than yesterday and 16.2% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
See how shifts in GBP/USD retail positioning are impacting trend- Click here to learn more about sentiment!
Relevant Data Releases
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Other Setups in Play
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- USD/CAD Bears to Face NFP / Canada Employment
- EUR/USD Technical Analysis – Price Rebound Eyes Key Resistance Hurdles
- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at email@example.com