The British pound found itself grappling with the large psychological band 1.40 in early trading hours on Wednesday. What followed was a sizeable pullback during London’s morning segment, reaching as far south as 1.3915. Leaving the 1.39 handle unchallenged, however, the unit managed to reclaim earlier losses and revisit 1.40 going into the closing bell.
Both weekly and daily structures suggest that 1.40 may be on the verge of giving way. After daily action crossed above 1.3878 (now acting support), the weekly broken Quasimodo line at 1.4079 was further pushed into the spotlight as a credible upside target.
Market direction:
The 1.40 level will still potentially be a tough nut to crack given it is a watched number in this market. However, we do feel it is a case of when not if this level is taken out.
To buy above 1.40, waiting for H4 price to retest the level as support and print a full or near-full-bodied H4 bull candle may be something to consider. The reason for this is that psychological numbers tend to attract fakeouts.
Data points to consider: UK employment numbers at 9.30am; US existing home sales at 3pm GMT.
Areas worthy of attention:
Supports: 1.39 handle; 1.3878.
Resistances: 1.40 handle; 1.4079.
Both weekly and daily structures suggest that 1.40 may be on the verge of giving way. After daily action crossed above 1.3878 (now acting support), the weekly broken Quasimodo line at 1.4079 was further pushed into the spotlight as a credible upside target.
Market direction:
The 1.40 level will still potentially be a tough nut to crack given it is a watched number in this market. However, we do feel it is a case of when not if this level is taken out.
To buy above 1.40, waiting for H4 price to retest the level as support and print a full or near-full-bodied H4 bull candle may be something to consider. The reason for this is that psychological numbers tend to attract fakeouts.
Data points to consider: UK employment numbers at 9.30am; US existing home sales at 3pm GMT.
Areas worthy of attention:
Supports: 1.39 handle; 1.3878.
Resistances: 1.40 handle; 1.4079.
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