H1 trendline support eyed

2020年7月9日

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Support at 1.1904/1.2235 and long-term trendline resistance (1.7191) offers clear structure on the monthly timeframe at the moment, with the latter prompting a notable upper shadow in June.

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008, placing 1.1904/1.2235 support in a vulnerable position.

Daily timeframe:

Partially altered from previous analysis -

Demand at 1.2192/1.2361 received price action last week, stirring a notable bid. This week has so far continued to build on recent momentum, moving to highs at 1.2669 yesterday.

Thursday wrapped up by way of a gravestone doji candlestick pattern, considered a bearish indicator, missing the 200-day simple moving average at 1.2688 by a hair. A violation of this dynamic value unearths supply at 1.3021/1.2844.

H4 timeframe:

Leaving supply at 1.2720/1.2682 unopposed Thursday, downside gained speed.

Overall, though, price action remains compressing within the walls of an ascending channel formation between 1.2257/1.2530. The next available demand, outside of channel support, rests at 1.2462/1.2506, standing just ahead of support at 1.2453.

H1 timeframe:

Following a 1.26 retest, price gathered momentum to the upside in early Asian trading on Thursday, a move that eventually eclipsed 1.2650 resistance and tested highs at 1.2669.

Things turned sour heading into the US session, however, as the DXY strived to regain lost ground. This hurled GBP/USD back to 1.26, which remains in motion as we transition into Asia Friday.

Failure to influence buyers off 1.26 shines light on nearby trendline support (1.2257), accompanied by the 100-period simple moving average. Traders will note the aforesaid trendline represents the underlined channel support, based on the H4 timeframe.

Structures of Interest:

The lack of enthusiasm off 1.26 is concerning.

For this reason, a dip to H1 trendline support (H4 channel support) is likely in store today. GBP/USD trendlines tend to perform favourably, particularly when accompanied by additional confluence (100-period simple moving average). However, traders will also want to pencil in the possibility of a whipsaw through the aforesaid trendline to 1.2550, before buyers step into the frame.