Sterling echoing a bearish tone.

29 thg 3, 2020

GBP/USD:

Monthly timeframe:

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

Bottoming at lows not seen since the 1980s, ahead of a 127.2% Fib ext. level at 1.1297, March’s candle is staging an impressive recovery and has regained approximately 80% of the month’s losses.

Support at 1.1904/1.2235 may, albeit having its lower edge recently shattered, remain relevant should price close the month above its base. Nearby resistance can be seen in the form of a trendline formation (1.7191).

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.

Daily timeframe:

Partially altered from previous analysis -

Trendline supports drawn from 1.2373 and 1.2041 continue to serve as a technical ‘floor’ in this market, with price recently going toe-to-toe with an interesting area of supply from 1.2212/1.2075, with the bulls clearly the victor here.

Supply at 1.2509/1.2372 entered view as a result of further buying Friday, closing not too far off best levels and potentially threatening moves to demand-turned supply at 1.2649/1.2799, which holds the 200-day SMA at 1.2663.

The RSI indicator continues to extend off lows at 17.00, recently crossing through 50.00.

H4 timeframe:

Reinforced by softening demand for the greenback, Friday watched sterling reach for higher ground after retesting a supply-turned demand base at 1.2136/1.2049. Upside landed the candles within close proximity of a reasonably robust supply at 1.2622/1.2517, close by a 61.8% Fib retracement value at 1.2499. Another supply worthy of note is 1.2854/1.2808, effectively representing the decision point that broke the 1.2725 28th February low.

Also significant on this timeframe is the recent formation of demand plotted at 1.2147/1.2257.

H1 timeframe:

Supply at 1.2520/1.2455 made its debut ahead of the weekly close Friday, offering minimal reaction. Note this area comes with additional resistance in the form of a round number at 1.25, a possible wave 5 completion and the RSI indicator pencilling in bearish divergence from overbought space.

Selling could land 1.24 in view, with a break drawing focus towards 1.23 and channel resistance-turned support (1.1972).

Structures of Interest:

Long term:

We trade within daily supply at 1.2509/1.2372, though possible moves above this region are in sight to demand-turned supply at 1.2649/1.2799 which holds the 200-day SMA at 1.2663.

Short term:

H1 supply, given its current local confluence on the H1 timeframe, is likely of interest today – even more so knowing the base is tied to the underside of H4 supply at 1.2622/1.2517 and glued to the top edge of daily supply at 1.2509/1.2372.