We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Real Time News
  • RT @YuanTalks: #China confirmed 1749 new cases of coronavirus, taking the total number of confirmed cases to 74,185 as of Tue, and the numb…
  • The $NZD may default back to the dominant downtrend against its US counterpart after a seemingly spirited recovery has ground to a halt. Get your market update from @IlyaSpivak here:https://t.co/LX4J53SnHQ https://t.co/O1ST0E4tQE
  • LIVE NOW: In this session, Currency Analyst @ddubrovskyFX discusses traders' positioning as a key element of market analysis to determine the prevailing and future price trends. https://www.dailyfx.com/webinars/998956395
  • About to start, join below! https://t.co/gYxr3QbMux
  • 🇦🇺 AUD Wage Price Index (YoY) (4Q), Actual: 2.2% Expected: 2.2% Previous: 2.2% https://www.dailyfx.com/economic-calendar#2020-02-19
  • The #Euro may have more room to fall versus its major peers such as the US Dollar, Japanese Yen and British Pound. What is the technical picture of EUR/USD, EUR/JPY and EUR/GBP? Find out from @ddubrovskyFX here:https://t.co/M6fLA9g3BK https://t.co/UcnG7bHJ9w
  • LIVE IN 30 MIN: In this session, Currency Analyst @ddubrovskyFX discusses traders' positioning as a key element of market analysis to determine the prevailing and future price trends. https://www.dailyfx.com/webinars/998956395
  • Heads Up:🇦🇺 AUD Wage Price Index (YoY) (4Q) due at 00:30 GMT (15min), Actual: N/A Expected: 2.2% Previous: 2.2% https://www.dailyfx.com/economic-calendar#2020-02-19
  • The US Dollar rally may extend on technical signals. The Japanese #Yen rose with #gold prices as #coronavirus fears sank equities across the globe, leaving investors on the edge again here - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/02/19/US-Dollar-Uptrend-May-Prolong-Yen-Gains-as-Equities-Fall-Globally.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/wDGBH3hLcb
  • RT @lisaabramowicz1: China’s economy was likely running at just 40%-50% capacity last week: Bloomberg Economics https://t.co/zkRkm5VzxU
GBP/USD Technical Analysis: Pound Pops into Confluent Zone; Reversal Afoot?

GBP/USD Technical Analysis: Pound Pops into Confluent Zone; Reversal Afoot?

2016-04-20 16:37:00
James Stanley, Currency Strategist
Share:

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

In our last article, we looked at the coagulated price action that was being seen in GBP/USD. As we had alluded to, when those situations arise there are really only two options, and they are somewhat related: Either a) walk away or b) outline a conditional setup and wait for price to meet your parameters.

We looked at a conditional setup derived from Fibonacci, and the top-side setup was triggered in the days following that most recent article; looking for support at the 1.4152 level.

The primary point of resistance was at 1.4251, and that level has been soundly broken with very little signs of selling as prices were rising. Price action has ascended through the next batch of resistance at 1.4349-1.4375, and is now trying to find support in this key area on the chart.

This could have the hallmarks of a new trend, with new support being established at old resistance; but rather than push the top-side move, I’m going to close the remainder of the position at market, as we may be seeing a short-side reversal setup beginning to show.

Five of the past seven four-hour candles are showing wicks at 1.4400, a clear sign of selling off of this resistance level; and the daily chart is working on a non-completed spinning top formation. A spinning top or Doji after a big move is indicative of a potential reversal, so this is somewhat trying to prelude a bearish harami setup.

Now, with that being said, there aren’t yet enough clear signs of reversal to trigger the short just yet; merely enough to obviate the preexisting long position. To plot for a short position, traders can watch the current batch of confluent support between 1.4349-1.4371, which includes three different Fibonacci levels over various time frames, as well as a projected trend-line. Should this batch of support yield, traders can then begin looking for resistance to develop in this area before triggering the short position.

Targets for prospective short positions could be set to prior support values at 1.4304, 1.4251, and then again off of 1.4152.

GBP/USD Technical Analysis: Pound Pops into Confluent Zone; Reversal Afoot?

Created with Marketscope/Trading Station II; prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.