H1 double-top off 1.26, anyone?

3 thg 6, 2020

GBP/USD:

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 remains in motion as we transition into June. Neighbouring resistance, should we see further recovery, can be found in the form of a trendline (1.7191). A violation of support, nevertheless, puts forward a 127.2% Fib ext. level at 1.1297.

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

Daily timeframe:

Brought forward from previous analysis -

GBP/USD retained its underlying bid Wednesday, latching onto its fifth successive gain, albeit in the shape of slowing momentum.

The pound’s days in the sun may be numbered, having seen price nearing supply at 1.2649/1.2799 (prior demand), an area aligning with the 200-day simple moving average at 1.2663.

H4 timeframe:

Resistance at 1.2624 had light thrown its way on Wednesday as the candles close in on the base, a level which has managed to withstand a number of upside attempts since mid-March.

Dipping from current levels could have support at 1.2520 re-join the party. Technically, this is a particularly appealing level should price test the point at which trendline support (1.2163) merges (green arrow).

H1 timeframe:

1.26 proved healthy resistance Wednesday, forming what appears to be a possible intraday double-top pattern off 1.2612 (blue arrows), with a neckline stationed at 1.2554. Breaking the aforesaid neckline could portend moves back to demand at 1.2511/1.2482 (prior supply), which holds 1.25 within.

Traders will also note the 100-period simple moving average, currently circling 1.2462, has been drifting higher since May 26 and is fast approaching the underside of current demand.

Structures of Interest:

Should we break the H1 double-top neckline at 1.2554, traders will expect an intraday dip in the direction of H1 demand at 1.2511/1.2482 (prior supply). Do note, however, price could establish support earlier than the H1 zones as H4 support enters play at 1.2520.

Breaking higher and violating H4 resistance at 1.2624, on the other hand, could have daily sellers make an entrance off the underside of daily supply at 1.2649/1.2799.