GBP Technical Analysis

GBP/CHF Triangle Pattern with an Elliott Wave Twist

Talking Points:

• Daily Triangle Consolidation in GBP/CHF
• Clear Elliott Wave Pattern Also in Progress
• The Ideal Time Frame for Selling GBP/CHF

As many currency pairs move into more confusing territory amid deeper pullbacks on their respective daily charts, the market environment is becoming one where probability favors the downside in many cases.
There are several valid responses to these conditions, one of which is to reduce risk on each trade. This will be particularly attractive to those who have been on winning streaks and wish to preserve recent gains.
Also, bear in mind that it’s best to not try to outsmart the market, so the best response is still to steadily take trades as the set-ups are being presented, and then manage each position as the market response develops.
The daily chart below of GBPCHF reflects a longer-term uptrend, but also a triangle-type consolidation pattern. Applying a Fibonacci expansion to recent price action reveals that there is a level of hidden resistance at 1.4845. Alone, this would be insufficient reason to take the trade, but Elliott wave theory provides another potential reason.

Guest Commentary: Daily Triangle Consolidation in GBP/CHF

http://media.dailyfx.com/illustratio...ruary26A_1.png

According to Elliott wave theory, every triangle should consist of five main waves, each containing a three-legged move. Thus far, there have only been three of these waves, which suggests that the current upswing should soon turn around within the triangle.

On the daily chart below, the 38.2% Fibonacci expansion level has been retained for reference, and a rough plot of how it should develop according to classic Elliott wave theory has been supplied. Of course, in the real world, anything can happen, but the best response is simply to enter short at the overhead resistance level in anticipation that this pattern will develop and ultimately complete.

Guest Commentary: Elliott-Inspired Set-up in GBP/CHF

http://media.dailyfx.com/illustratio...ruary26A_2.png

The four-hour chart below readily provides a resistance zone using the 38.2% Fibonacci expansion level coupled with previous support and resistance for GBPCHF. This key zone where a reaction is likely to materialize is 1.4845-1.4899, or 54 pips deep. That level of risk is very much acceptable for any cross pair involving the British pound (GBP).

Guest Commentary: Key Resistance Zone for Selling GBP/CHF

http://media.dailyfx.com/illustratio...ruary26A_3.png

A move to the bottom of the triangle formation would yield 100 pips or more, and although this trade is slightly less “juicy” than some others in terms of risk profile, when considering the consolidating nature of the markets and the need to be defensive in trade management, it is still quite appealing.

Any potential trade entries should be found on the hourly chart (not shown), which will facilitate a reduction in risk. Acceptable triggers will include pin bars, bearish engulfing patterns, and bearish reversal divergence.
Finally, and as always, two or three tries may be needed to trade this set-up, and indeed, multiple positions should be used in order to scale out should the trade begin to hesitate after the entry.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com


More...

A GBP/AUD Long That May Trigger Again

Talking Points:

• Daily Trend Line Break in GBP/AUD
• Price Reacting Off Short-Term Support
• Looking for a Second-Chance Entry Signal

After some prolonged choppiness this week, it was certainly a welcomed sight to see the GBPCAD trade we profiled here yesterday move violently in our favor. However, traders will note that the bulk of the move was actually supported by the Canadian dollar (CAD), and not the British pound (GBP), which has instead continued somewhat sideways.
Thus, today's GBPAUD trade, which also favors the long side, is intended to catch a move up in the pound while also benefiting from a potential weakening in the Australian dollar (AUD).

Traders often wait impatiently for price to come towards a trend line, but when it is actually tested, they fear the entry, wondering whether the trend line will hold. In line with the dictum that it is better to trade “with the trend,” the assumption that it will hold at some point is usually better than the alternative.
In the case of GBPAUD, it is best to treat the break of the trend line on the below daily chart as a false signal, or at least one that will generate a retest of the broken trend line.

Guest Commentary: Daily Trend Line Break for GBP/AUD

http://media.dailyfx.com/illustratio..._March7A_1.png

The four-hour chart below shows that price is already at support that has been generated from past horizontal price action. The desired move to the upside has in excess of 400 pips to reach the previous high. Meanwhile, the support zone is 1.8260-1.8373, or 113 pips deep. This clearly represents a favorable risk profile, making this long set-up in GBPAUD one worthy of consideration.

Guest Commentary: Key Support Zone for Buying GBP/AUD

http://media.dailyfx.com/illustratio..._March7A_2.png

The hourly chart, however, reveals some complications with regard to this trade's entry.

As shown below, bullish reversal divergence is already visible on the hourly chart, and price is beginning to turn up. Although the more intrepid traders may be tempted to hop on, this market environment is still far from safe, and as a result, the preferred entry trigger would be for price to make a lower low and flash another divergence signal. It is also possible to enter on a pin bar or bullish engulfing pattern once that lower low is made.

Guest Commentary: Awaiting Another GBP/AUD Entry Signal

http://media.dailyfx.com/illustratio..._March7A_3.png

If price runs up without providing one more swipe for entry, then it is likely better to miss this trade than to try and hop onto it too early (or perhaps too late). If it does come back down, then two or three tries at the entry would be appropriate given the attractive nature of this set-up.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com


More...

Forex Strategy - GBP/USD Range-Bottom At 1.6600 In Focus

Talking Points

• GBP/USD Technical Strategy: Sidelines Preferred
• Range between 1.6600 and 1.6765/70 intact
• Dark Cloud Cover on weekly warns of larger correction

The range between 1.6600 and 1.6765/70 for the Pound remains in force. While a test of the range-top looked possible yesterday, sellers at the 50% Fib Retracement level at 1.6690 acted to cap the GBP/USD’s advance. This has resulted in a Bearish Engulfing candlestick pattern that is threatening a break of the range-bottom at 1.6600.

GBP/USD Range Remains Intact

https://media.dailyfx.com/illustrati..._Picture_3.png


A break below 1.6600 may open up the 50% Fib Retracement level on the daily at 1.6536.

GBP/USD Signs of Indecision on Daily

https://media.dailyfx.com/illustrati..._Picture_2.png

The ominous Dark Cloud Cover formation on the weekly at multi-year resistance also remains on the radar, and may be warning of a more significant correction ahead for the Pound.

GBP/USD Weekly Warns of Declines

https://media.dailyfx.com/illustrati..._Picture_1.png

By David de Ferranti, Market Analyst, FXCM

More...

Talking Points

• GBP/USD Technical Strategy: Sidelines Preferred
• Range between 1.6600 and 1.6765/70 intact
• Dark Cloud Cover on weekly warns of larger correction

This week will be critical for the Pound as the pair threatens a downside break of the recent trading range. Several successive short sessions suggests conviction may not be strong enough amongst the bulls to push prices back to the 1.6770 top. A break of the range-bottom at 1.6600 would open up the 50% Fib Retracement level at 1.6540.

GBP/USD Signs of Indecision on Daily

https://media.dailyfx.com/illustrati..._Picture_3.png

As noted in yesterday’s GBP/USD candlesticks report the 1.6650 mark remains a key intraday level of resistance and may continue to cap gains for the pair.

GBP/USD Range Break Threatened

https://media.dailyfx.com/illustrati..._Picture_2.png

The ominous Dark Cloud Cover formation on the weekly at multi-year resistance also remains on the radar, and is threatening a more significant correction ahead for the Pound. A potential target is offered by the 23.6% Fib Retracement Level near 1.6350.

GBP/USD Weekly Offers Warning

https://media.dailyfx.com/illustrati..._Picture_1.png

By David de Ferranti, Market Analyst, FXCM

More...

Forex: GBP/JPY Technical Analys

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 168.08-47 (50% Fib exp., trend line), 166.79 (61.8% Fib exp.)
• Resistance: 169.37 (38.2% Fib exp.), 170.97 (23.6% Fib exp.)

The British Pound is stalling at rising trend line support set from August 2013 (168.47) after falling as expected against the Japanese Yen. The downside barrier is bolstered by the 50% Fibonacci expansion at 168.08. A break below this boundary exposes the 61.8% level at 166.79. Alternatively, a turn above resistance at 169.37 – the 38.2% Fib – targets the 23.6% expansion at 170.97.

Prices are too close to relevant near-term up- and downside technical barriers to make a trade at current levels attractive from a risk/reward perspective. We will continue to stand aside for now, waiting for a more attractive setup to present itself.


https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

Talking Points:

• GBP/USD Technical Strategy: Flat
• Support: 1.6469 (61.8% Fib ret., trend line), 1.6386 (76.4% Fib ret.)
• Resistance: 1.6536 (50% Fib ret.), 1.6604 (38.2% Fib ret.)

Risk/reward considerations argue against entering short with prices so close to support. On the other hand, taking up the long side looks premature absent a defined reversal signal. We will continue to stand aside until a more actionable setup emerges.


https://media.dailyfx.com/illustrati...Picture_12.png


--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

A Long Set-up Rarely Seen in GBP/CAD

Talking Points:

• Potential False Break on GBP/CAD Daily Chart
• Rare Parallel Channel Consolidation in Play Now
• Added Validation for GBP/CAD Longs

GBPCAD is currently demonstrating a rather unusual situation: a sideways range that is relatively even and textbook in nature. In spite of how often texts about technical analysis show this sort of perfectly ranging market, they are, in practice, quite rare.
In fact, even this situation is not perfect, as will be demonstrated later on the four-hour chart. However, the set-up happens to be in the direction of the daily trend, and as a result, it certainly comes as a viable trading opportunity.

As seen on the daily chart below, a rising trend line has been broken recently, and as with all countertrend breakouts, and especially one that has been intact for so long, it is wise to assume that it is false. And, if so, traders may be able to buy GBPCAD at an advantageous price level and capitalize on a resumption of the prevailing uptrend.

False Break on GBP/CAD Daily Chart

https://media.dailyfx.com/illustrati...March28A_1.png

Even if price only went up to retest the underside of the previous trend line support, there would be more than 150 pips to be had in that move. Needless to say, if price continues higher and the uptrend resumes, the proposition becomes increasingly attractive.

The sideways motion mentioned earlier can be seen to the right on the daily chart above, and one interpretation of that would be a sideways consolidation pattern. However, the four-hour chart below offers a more precise perspective.

This level of magnification shows that the consolidation is actually edging slowly down in a mostly consistent parallel channel. Price is now near support, as estimated from the declining line of support, as well as the double-bottom territory with which GBPCAD is currently flirting. The final support zone has been marked out as 1.8216-1.8295.

Parallel Consolidation in GBP/CAD

https://media.dailyfx.com/illustrati...March28A_2.png

It is perhaps notable that if this had truly been a sideways consolidation, price would now be in a zone of particular interest to many professional traders. A false breakout to the downside followed by a quick reversal would leave many breakout sellers caught, and if all went according to plan, the panicked liquidation of short positions at that juncture could lead to a swift rise in GBBCAD.

Of course, the market does what the market wants, but this trade has that type of reversal potential nonetheless.

There is also a parallel channel on the hourly chart below, which lends further credence to the idea that support may be imminent. The best triggers for this trade would be bullish engulfing patterns, bullish reversal divergence, and/or pin bars on this hourly time frame.

Further Validation for GBP/CAD Longs

https://media.dailyfx.com/illustrati...March28A_3.png

This move is currently showing some choppy action as evidenced by the last few candlesticks, but the good news is that most traders would have missed this anyway, and thus, the interaction will begin after price has had a chance to make up its mind. Nonetheless, the usual two or three attempts to get in on a potential bullish move up should be anticipated and prepared for.
By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com


More...

Talking Points:

• Potential Re-test of Broken Trend Line
• 2 Concurrent Signals on the 4-Hour Chart
• Rising Wedge Pattern in Play for GBP/AUD

It is rare for a double-top pattern to represent a potential entry point in forex—or in other markets, for that matter—as prices often overshoot the estimated turnaround area. Today's trade is no exception to that general rule, although this is as close to a double top as we’re likely to see in such choppy markets.

The story begins on the daily chart of GBPAUD, which is showing somewhat bearish momentum. A trend line was recently broken, but it has yet to be retested. That is a prime opportunity to look for a potential short set-up in order to hop on should the trend line break prove false and the move continue to the down side. Nonetheless, even a return to test the top of the broken trend line would quite easily produce a move in excess of 200 pips.

Guest Commentary: Daily Trend Line Break in GBP/AUD

https://media.dailyfx.com/illustrati...April17A_1.png

As seen on the below four-hour chart, price has already hesitated once at a previous overhead resistance cluster, as marked. The pin bar that resulted on the four-hour chart did not result in a downward move, but it was sufficient evidence to support the continued presence of sellers in the area of the shaded blue box. Should price reverse from its current location, a double top (or as close to one as can be reasonably expected in forex) would be formed.

It is also worth noting that this short trade is actually in the direction of the daily trend, and not against it.

Guest Commentary: Key Resistance Zone for Selling GBP/AUD

https://media.dailyfx.com/illustrati...April17A_2.png

The estimated resistance zone is 1.7976-1.8061, an area that is 85 pips in depth and ultimately insufficient from a risk standpoint to justify taking this trade. As a result, a lower time frame will have to be employed in order to improve the ratio and find a viable trade trigger.

Things look rosier on the hourly chart below, where a wedge-type pattern has formed. Price is now creeping steadily along the lower boundary of the wedge, which is a sign of decreased momentum. It may well simply break down here, although it is equally possible that a retest of the highs or even a temporary spike past the top of the wedge may occur.

Guest Commentary: Rising Wedge on GBP/AUD Hourly Chart

https://media.dailyfx.com/illustrati...April17A_3.png

In all, the safest response is to hold off until at least a new high has been made, allowing for the potential occurrence of bearish reversal divergence in the process. Should such divergence not appear, pin bars and/or bearish engulfing candlestick patterns would also indicate viable short-entry opportunities, particularly if price made a last-minute momentum move.

The hourly time frame should provide a risk zone most likely in the 35- to 50-pip range, which is small enough to justify taking this trade. Nonetheless, two or three attempts may be required to successfully hop on to this move. One last item firmly in this trade's favor, however, is the fact that the four-hour chart is currently displaying six consecutive bullish bars, and reversion to the mean theory suggests that GBPAUD is now overdue for some bearish movement.
By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com


More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 171.91 (23.6% Fib exp.), 171.37 (38.2% Fib exp.)
• Resistance:172.66 (triangle top)

The British Pound may be readying to turn lower against the Japanese Yen after prices put in a Bearish Engulfing candlestick pattern below resistance at the top of a Triangle setup carved out since the beginning of the year. Near-term support is at 171.91, the 23.6% Fibonacci expansion, with a break below that aiming for the 38.2% level at 171.37. Triangle resistance is now at 172.66.
Risk/reward considerations argue against taking a short position with prices trading in close proximity to relevant support. We will remain flat for the time being, waiting for a more attractive setup to present itself.


https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

A Nearby "Hot Spot" for GBP/NZD Longs

Talking Points:

• Aggressive Downtrend and Consolidation in GBP/NZD
• 4 Concurrent Bullish Signals Flashing Right Now
• How to Trade a New GBP/NZD Uptrend

Today, we look to the daily chart of GBPNZD, where a bullish technical event has now shifted the dynamics on the chart to favor further upside price movement. The pattern on the below chart should be especially interesting for swing traders who like to catch medium- and longer-term market movements.

One simple yet powerful thing to keep in mind about support and resistance is that the dominant levels on the weekly time frame generally act as major turning points in the market. As shown, GBPNZD tested a major weekly resistance level in February 2014, and it’s no surprise that the market sold off aggressively from this point and began a full-blown downtrend from there.

Guest Commentary: Aggressive Downtrend in GBP/NZD

https://media.dailyfx.com/illustrati...April25A_1.png

The downtrend lasted for several weeks, with nearly every daily candle closing much lower than the day’s opening price. These “straight-line” trends can be very potent and produce explosive price movements. However, we all know the market doesn’t move in a straight line forever.

After the strong downtrend momentum died off, GBPNZD fell into a consolidation phase, grinding sideways for a little over a month. A general rule of thumb for such consolidation patterns is that the longer the consolidation, the more potent the ensuing breakout. And, consistent with that rule of thumb, during last week’s trading, bullish momentum in GBPNZD built up to a critical level and we finally saw an initial breakout.

As shown, GBPNZD breached the key resistance level that had been containing price for the month prior. This bullish rally ultimately continued and resulted in the formation of new recent highs.

Essentially, the dynamics have now gone from bearish to bullish for GBPNZD, and technical signals are aligned and suggesting further upside movement ahead. Some of the key points that currently give a bullish bias include:

• GBPNZD is now trading above the critical resistance level
• A higher high has been formed
• Price is trading on the bullish side of the mean value, as indicated by the 10- and 20-period exponential moving averages (EMAs)
• The mean value is angled upwards, reflecting this new bullish momentum

How to Trade a New GBP/NZD Uptrend

In all, we’re looking for the potential formation of a sustained bullish trend in GBPNZD, and are waiting for the market to weaken and correct back downwards to re-test the previous resistance (now support) level. If this market has any chance of developing a clean new uptrend, this horizontal level will need to hold as support.

Guest Commentary: Key Support Zone for Buying GBP/NZD

https://media.dailyfx.com/illustrati...April25A_2.png

The area we’re targeting for possible long-entry positions also coincides with the mean value (10 and 20 EMA), which behaves as dynamic support during bullish trends.

The synchronicity of these uncorrelated variables creates a nice “hot spot” where bullish reversal set-ups may develop. Traders should wait for bullish candlestick reversal patterns including pin bars, engulfing candles, outside candles, or even proprietary, system-generated buy signals before initiating new long positions.

When we switch over and look at price action on the weekly chart of GBPNZD, it’s easier to see the “bigger picture” and discern longer-term market direction. As shown below, the weekly chart suggests the pair is looking to retest the major weekly resistance level around the 2.0200 level, as range-bound conditions continue to prevail on the weekly time frame.

Guest Commentary: Prevailing Weekly Range for GBP/NZD

https://media.dailyfx.com/illustrati...April25A_3.png

By Graham Blackmore of TheForexGuy.com


More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 172.13 (50% Fib exp.), 171.49-64 (38.2% Fib exp., Triangle floor)
• Resistance:172.76 (61.8% Fib exp., Triangle top), 173.55 (76.4% Fib exp.)

The British Pound continues to look for clear-cut direction cues against the Japanese Yen, with prices consolidating in a large Triangle chart formation. Near-term support is at 172.13, the 50% Fibonacci expansion, with a break below that targeting the intersection of the 38.2% level and the Triangle bottom in the 171.49-64 area. Alternatively, a daily close above the 172.76 – marked by the 61.8% Fib and the Triangle top – initially exposes the 76.4% expansion at 173.55.

On balance, a Triangle pattern typically implies trend continuation, which carries bullish implications in this case. Confirmation is absent without a clear-cut break above the formation’s upper boundary however. With that in mind, we will continue to stand aside for now.


https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



More...

Talking Points

• GBP/USD Technical Strategy: Sidelines Preferred
• Key support remains at the critical 1.6820 mark
• Piercing Line pattern hints at a bounce in intraday trade

GBP/USDhas bounced off key support at 1.6820 after posting some modest declines on the back of a Harami candlestick pattern. Given the absence of a bullish reversal signal on the daily and nearby resistance at 1.6900, the pair may struggle to continue its recovery.

GBP/USD: Struggles Below 1.6900 Following Harami Pattern

https://media.dailyfx.com/illustrati..._Picture_2.png


As noted in yesterday’s report the Evening Star pattern on the four hour chart hinted at a drop for GBP/USD during the session. The emergence of a Piercing Line formation near support at 1.6820 now suggests a recovery may be on the cards. Given noteworthy resistance looms at 1.6900, follow-through may prove limited.

GBP/USD: Piercing Line Puts Bounce On The Cards

https://media.dailyfx.com/illustrati..._Picture_1.png

By David de Ferranti, Market Analyst, DailyFX

More...

Talking Points:

• GBP/JPY Technical Strategy: Short at 172.26
• Support: 169.86 (38.2% Fib ret.), 168.71 (50% Fib ret.)
• Resistance:171.27 (23.6% Fib ret.), 172.82 (triple top)

The British Pound rebounded against the Japanese Yen after turning downward as expected but gains appear to be corrective. Resistance is marked by a trend line cluster in the 171.91-172.07 area, with a break above that on a daily closing basis exposing a triple top at 172.82.Near-term support is at 169.86, the 38.2%Fibonacci retracement. A push below that opens the door for a challenge of the 50% Fib at 168.71.

We sold GBPJPY at 172.26 and took profit on half of the positionat 171.27. The series of lower highs and lower lows – the definition of a down trend – initiated from the May 2 peak remains in place. As such, we will keep the remainder of the trade in play with a stop-loss set to the breakeven level (172.26).

https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

Talking Points:

• GBP/USD Technical Strategy: Flat
• Support:1.6808 (trend line), 1.6711 (38.2% Fib ret.)
• Resistance:1.6920 (May 21 high), 1.6996 (May 6 high)

The British Pound edged downward anew against the US Dollar, with prices back to re-test rising trend support established from early February (now at the 1.6808 figure). A daily close below this barrier initially targets the 38.2% Fibonacci retracement at 1.6711. Resistance comes in at 1.6920, the May 21 high, with a break above that opening the door for a challenge of the May 6 top at 1.6996.

Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, taking up the long side seems premature in the absence of a defined bullish reversal signal. We will remain on the sidelines for the time being.


https://media.dailyfx.com/illustrati..._Picture_9.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 171.95 (61.8% Fib ret.), 171.49 (50% Fib ret.)
• Resistance: 172.28 (trend line), 172.52 (76.4% Fib ret.), 17.45 (May 2 high)

The British Pound may be exhausting its advance against the Japanese Yen as prices test trend line resistance dating back to early March (172.28). A break above this barrier on a daily closing basis exposes the 76.4% Fibonacci expansion at 172.52, followed by the May 2 high at 173.45. Near-term support is at 171.95, the 61.8% Fib, with a move below that initially targeting the 50% level at 171.49.

The available trading range is too narrow to justify a trade on the long or the short side from a risk/reward perspective. We will remain on the sidelines and wait for a more attractive opportunity to present itself.


https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 172.00 (61.8% Fib exp.), 171.53 (50% Fib exp.)
• Resistance: 172.21 (trend line), 172.59 (76.4% Fib exp.)

The British Pound managed to claw its way back above the 172.00 level against the Japanese Yen on the back of supportive rhetoric from BOE Governor Carney. Prices are testing resistance at 172.21 marked by a falling trend line set from January. A daily close above this barrier initially exposes the 76.4% Fibonacci expansion at 172.59. Alternatively, a reversal back below the 61.8% Fib at 172.00 clears the way for a test of the 50% expansion at 171.53.
Risk/reward considerations argue against entering long with prices sitting squarely at resistance. On the other hand, taking up the short side is premature absent a defined bearish reversal signal. We will remain flat for now.

https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

Talking Points

• GBP/USD Technical Strategy: Longs Preferred
• Morning Starsuggests potential for further gains
• Bearish patterns remain absent on the daily

GBP/USD’s promises a further push higher following a Morning Star formation on the daily. With current levels not witnessed since 2008, definitive areas of resistance are not easily identifiable. This suggests traders may defer to psychologically-significant handles to look at taking profits and puts 1.7200 on the radar.

GBP/USD: Morning Star Heralded Upside Breakout
https://media.dailyfx.com/illustrati..._Picture_2.png

Drilling down to the four hour chart; a Dark Cloud Cover pattern had hinted at a reversal in intraday trade, yet failed to find follow-through. This suggests the bulls remain in control and creates doubt over a potential pullback.

GBP/USD: Dark Cloud Cover Finds Little Follow-Through

https://media.dailyfx.com/illustrati..._Picture_1.png4

By David de Ferranti, Market Analyst, DailyFX

More...

Talking Points

• GBP/USD Technical Strategy: Sidelines Preferred
• Narrow range between 1.7100 and 1.1710 remains in play
• Dojis denote deliberation as consolidation continues

GBP/USD continues to keep traders in suspense as the pair wavers within a narrow 70 pip range between 1.7100 and 1.7170. A lack of definitive bearish reversal candlestick signals casts doubt on a correction below support.

GBP/USD: Range Remains In Force As Doji Signal Trader Indecision

https://media.dailyfx.com/illustrati..._Picture_2.png

Drilling down to the four hour chart; several Dojis near 1.7170 suggest hesitation from traders near the key technical level. A test of the range-bottom at 1.7100 may afford new long entries as the recent range remains intact.

GBP/USD: Doji Denotes Hesitation Near Key Resistance

https://media.dailyfx.com/illustrati..._Picture_1.png

By David de Ferranti, Currency Analyst, DailyFX

More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 173.53, 173.13, 172.44
• Resistance: 173.98, 174.50, 175.35

The British Pound moved lower against the Japanese Yen as expected after producing a bearish Evening Star candlestick pattern. Prices are testing support at a rising trend line set from late May (173.53), with a daily close below that exposing the 38.2% Fibonacci retracement at 173.13. Alternatively, a reversal above the 23.6% Fib at 173.98 opens the door for a move to the 14.6% retracement at 174.50.

Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal argues against taking up the long side. We will remain flat for now.

https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

Talking Points

• GBP/USD Technical Strategy: Pending Long
• Bullish reversal pattern forming on the daily chart
• Bearish formations absent in intraday trade

GBP/USD’s recovery is set to yield a Bullish Engulfing pattern on the daily chart if the current candle manages to close near present levels. The key reversal pattern would suggest a run on the recent highs at 1.7170 and be the first step towards an upside breakout.

GBP/USD: Bullish Engulfing Pattern Forming On Daily

https://media.dailyfx.com/illustrati..._Picture_2.png


Drilling down to the four hour chart; several Doji formations near 1.7060 denoted hesitation from traders to push past the key technical level. With bearish patterns absent in intraday trade at this stage a pullback for the Pound looks doubtful.

GBP/USD: Bearish Patterns Absent In Intraday Trade

https://media.dailyfx.com/illustrati..._Picture_1.png

By David de Ferranti, Currency Analyst, DailyFX

More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 170.66, 169.55, 167.76
• Resistance: 171.56, 172.08, 172.45

The British Pound declined as expected against the Japanese Yen after putting in a bearish Evening Star candlestick pattern. Near-term support is at 170.66, the 61.8% Fibonacci retracement, with a break below that on a daily closing exposing the 76.4% level at 169.55. Alternatively, a reversal above the 50% Fib at 171.56 targets rising trend line support-turned-resistance at 172.08.

We will tactically opt to stand aside for now. While entering a short trade seems compelling, the weekly chart shows prices testing support in play since November 2013. Furthermore, our fundamental outlook leaves room for a GBP recovery this week. On balance, we will stand aside.


https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 171.79, 171.26, 170.61
• Resistance: 172.64-83, 173.33, 174.01

The British Pound is attempting to overturn the down trend initiated against the Japanese Yen in early July above the 175.00 figure. Near-term resistance is in the 172.64-83 area, marked by the 38.2% Fibonacci expansion and a falling trend line. A break above that on a daily closing basis exposes the 50% level at 173.33. Alternatively, a turn below the 23.6% Fib at 171.79 opens the door for a test of the 14.6% expansion at 171.26.

Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now.

https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 172.64, 171.79, 171.26
• Resistance: 173.33, 174.01, 174.87

The British Pound launched upward against the Japanese Yen as expected, with prices touching the highest level in over a month. Near-term resistance is at 173.33, the 50% Fibonacci expansion, with a break above that on a daily closing basis exposing the 61.8% level at 174.01. Alternatively, a turn below the intersection of the 38.2% Fib and trend line resistance-turned-support at 172.64 opens the door for a test of the 23.6% expansion at 171.79.

Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now.

https://media.dailyfx.com/illustrati...Picture_12.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 172.39-64, 171.79, 170.64
• Resistance: 173.33, 174.01, 174.87

The British Pound pulled back after rebounding as expected against the Japanese Yen, testing the upswing’s guiding trend line. A daily close belowthe 172.39-64 area marked by a horizontal support shelf, a rising trend line and the 50% Fibonacci expansion exposes the 23.6% level at 171.79. Alternatively, a reversal above the 50% Fib at 173.33 clears the way for a challenge of the 61.8% expansion at 174.01.

Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. With that in mind we will remain flat for now.

https://media.dailyfx.com/illustrati..._Picture_3.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 171.47, 170.65-89, 170.17
• Resistance: 172.05, 172.52, 173.28

The British Pound turned lower anew against the Japanese Yen, overturning the rising trend carved out over the past three weeks. Near-term support is at 171.47, the 50% Fibonacci expansion, with a break below that on a daily closing basis exposing the 170.65-89 area marked by a rising trend line and the 61.8% level. Alternatively, a turn above the 38.2% Fib at 172.05 opens the door for a retest rising trend line support-turned-resistance at 172.52
The available trading range is too narrow to justify taking up a long or short position from a risk/reward perspective. With that in mind, we will continue to stand aside for the time being and wait for an actionable setup to present itself.

https://media.dailyfx.com/illustrati...Picture_12.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com




More...

Talking Points

• GBP/USD Technical Strategy: Sidelines Preferred
• Dark Cloud Cover Receives Confirmation
• Bullish Engulfing Pattern Emerges On H4

GBP/USD remains in a congestion “zone” with a Dark Cloud Cover formation in the rearview mirror. The key reversal candlestick pattern has received confirmation from a successive down-day, which may herald a return to the recent lows near 1.5950. A more convincing close above the 1.6170 barrier would be required to negate the bearish reversal pattern and open the 1.6400 ceiling.

Recovery Loses Steam As A Bearish Pattern Emerges

https://media.dailyfx.com/illustrati..._Picture_2.png

The four hour chart paints a divergent picture to the daily. A Bullish Engulfing formation near the 1.6000 floor signals the potential for an advance over the session ahead. A break above the 1.6130 mark could clear the way for a push towards the recent highs near 1.6210.

Reversal Signal Offers Hope To The Bulls In Intraday Trade

https://media.dailyfx.com/illustrati..._Picture_1.png

By David de Ferranti, Currency Analyst, DailyFX


More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 169.33, 167.72, 166.00
• Resistance: 170.50, 171.36, 172.21

The British Pound remains under pressure, with prices on pace to issue the lowest daily close in five months against the Japanese Yen. Near-term support is in the 169.33-44 area, marked by the September 8 low and the 76.4% Fibonacci expansion, with a break below that on a daily closing basis exposing the 100% level at 167.72. Alternatively, a reversal back above the 170.41-46 zone (August 15 low, 61.8% Fib) clears the way for a challenge of the 50% expansion at 171.36.

The available trading range is too narrow to justify a trade on the long or short side from a risk/reward perspective. With that in mind, we will remain on the sidelines for now until a more attractive opportunity presents itself.

https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com




More...

Talking Points

• GBP/USD Technical Strategy: Sidelines Preferred
• Bullish Reversal Signal Finds Confirmation
• Doji On H4 Signals Indecision In Intraday Trade

GBP/USD continues its cautious recovery following the appearance of a Piercing Line pattern near its recent lows. Yet recent reversal patterns have seen a limited response from traders. Alongside a core downtrend some skepticism over further advance may be warranted. Selling interest is likely to be renewed at the 1.6170 ceiling. While a daily close below 1.5880 would potentially open the way for a descent towards the mid-September 2013 low near 1.5770.

Bullish Signal Emerges At Key Support

https://media.dailyfx.com/illustrati..._Picture_2.png

The four hour may already be warning of fading upside momentum for the Pound. A Doji formation near 1.6130 suggests reluctance from the bulls to lead the pair higher. Yet an absence of classic reversal signals leaves a pullback as questionable over the session ahead.

Doji Highlights Hesitation In Intraday Trade

https://media.dailyfx.com/illustrati..._Picture_1.png

By David de Ferranti, Currency Analyst, DailyFX

===========

Forming bullish Retracement pattern:

Attachment 10262

Forming bullish ABCD pattern:

Attachment 10263

Forming bullish 3-Draves pattern:

Attachment 10264


More...

Talking Points

• GBP/USD Technical Strategy: Shorts Preferred
• Harami Awaits Confirmation Near 1.5880
• H4 Chart Offered Early Hint At A Bounce

GBP/USD is poking above the 1.5880 mark in the wake of a Harami pattern. A close above the barrier would help confirm the key reversal formation and open the prospect of a more sustained recovery. Selling interest would likely be renewed at the 1.6170 ceiling. A slide back below 1.5880 would see the risks skewed towards the Mid-September 2013 low near 1.5770.

Harami Awaits Confirmation Near Key Barrier

https://media.dailyfx.com/illustrati..._Picture_2.png

The four hour chart offered an early bounce signal in the form of a Morning Star formation. With bearish patterns seemingly lacking a push higher over the session ahead may be achievable. Yet it should be monitored closely for signs of exhaustion that could be evidenced by Doji candlesticks.

Lacking Reversal Signs In Intraday Trade

https://media.dailyfx.com/illustrati..._Picture_1.png

By David de Ferranti, Currency Analyst, DailyFX

More...

Talking Points

• Strategy: Short, Stop: 1.5770 (Close), Target: 1.5450
• Doji Suggests Bulls Reluctant To Return
• Short Body Candles Indicate Indecision

GBP/USD has posted a Doji on the daily, which does little to inspire confidence in the reversal signal offered by a Morning Star pattern. This leaves broader negative technical cues to linger. Further, the presence of a short-term downtrend puts the focus on 1.5585, which if broken may open the 1.5425 floor (the late August ’13 low).

Doji Does Little To Confirm Morning Star Pattern

https://media.dailyfx.com/illustrati..._Picture_2.png

The four hour timeframe paints a similar picture to the daily. A medley of short body candles and Doji formations further indicates a lack of conviction amongst traders.

Medley Of Short Body Candles Indicates Indecision

https://media.dailyfx.com/illustrati..._Picture_1.png


By David de Ferranti, Currency Analyst, DailyFX


More...

Talking Points

• Strategy: Flat, Short Pending On Close Below 1.5585
• Awaiting Guidance Near Key Technical Barrier
• Morning Star Taking Shape On H4 Chart

GBP/USD is once again pressing against its range bottom near 1.5585 as a Doji emerges on the daily. The pattern suggests reluctance from the bears to drag the pair lower. Yet it is not a key reversal pattern, which in turn casts some doubt over the potential for a bounce back to the 1.5800 ceiling.

Doji Emerging Near Range-Bottom

https://media.dailyfx.com/illustrati..._Picture_2.png

The four hour timeframe is beginning to paint a more constructive picture. The close of the current candle in its present position would mark a Morning Star formation. Such a bullish reversal signal would return the risks higher towards the 1.5800 mark.

Morning Star Taking Shape In Intraday Trade

https://media.dailyfx.com/illustrati..._Picture_1.png


By David de Ferranti, Currency Analyst, DailyFX


More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 184.58, 181.41, 178.85
• Resistance: 188.32, 189.70, 191.45

The British Pound declined as expected against the Japanese Yen after putting in a bearish Evening Star candlestick pattern. Near-term support is at 184.58, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 181.41. Alternatively, a turn above channel floor support-turned-resistance at 188.32 clears the way for a challenge of the December 5 high at 189.70.
An actionable trade setup is absent for the time being. We will stand aside, waiting for the pair to produce a better-defined long or short trade opportunity.

https://media.dailyfx.com/illustrati...Picture_12.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 178.85, 176.29, 173.12
• Resistance: 181.41, 184.58, 186.53

The British Pound slumped to a two-month low against the Japanese Yen, with prices now eyeing support below the 179.00 figure. A daily close below the 50%Fibonacci retracement at 178.85 exposes the 61.8% level at 176.29. Alternatively a reversal above the 38.2% retracement at 181.41clears the way for a challenge of the 23.6% retracement at 184.58.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.

https://media.dailyfx.com/illustrati...Picture_11.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



More...

Talking Points:

• GBP/USD Technical Strategy: Pending Long at 1.5373
• Support: 1.5166, 1.4980, 1.4750
• Resistance: 1.5322, 1.5551, 1.5737

The British Pound looks set to continue higher against the US Dollar having taken out resistance at the top of a falling channel in play since mid-September. A daily close above the 38.2% Fibonacci retracement at 1.5551 exposes the 50% level at 1.5737. Alternatively, a reversal below the intersection of channel top resistance-turned-support and the 23.6% retracement at 1.5322 clears the way for a test of a horizontal pivot at 1.5194.

Risk/reward considerations argue against entering long at current levels and we will set an entry order to buy the pair at 1.5373. If triggered, the position will initially target 1.5551 and carry a stop-loss activated on a daily close below 1.5194.

https://media.dailyfx.com/illustrati...Picture_12.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 182.08, 180.80, 178.73
• Resistance: 183.23, 184.27, 186.34

The British Pound snapped three days of losses against the Japanese Yen, moving to retest the boundaries of the down trend since early December. Near-term trend line resistance is at 183.23, with a break above that on a daily closing basis exposing the 61.8% Fibonacci retracement at 184.27. Alternatively, a reversal below the 14.6% Fib expansion at 182.08 clears the way for a challenge of the 23.6% level at 180.80.

Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short side is premature. With that in mind, we will remain flat for now.

https://media.dailyfx.com/illustrati...Picture_12.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 177.26, 175.77, 174.87
• Resistance: 178.74, 179.94, 181.14

The British Pound rose for a fourth consecutive day against the Japanese Yen, with prices now eyeing resistance above the 178.00 figure. Near-term resistance is at 178.74, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 50% level at 179.94. Alternatively, a turn below the 23.6% Fib at 177.26 clears the way for a challenge of the 175.77-176.35 area (triple bottom, 14.6% retracement).

We see the overall GBPJPY trend as favoring the downside after last week’s break of the 12-month uptrend set from February 2014 lows. With that in mind, we will opt against entering long and treat on-coming as corrective, looking for the move to offer a selling opportunity once upside momentum is exhausted.

https://media.dailyfx.com/illustrati..._Picture_2.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

• USD/JPY advance stalls at minor Fibo
• GBP/USD testing key upside pivot
• USDOLLAR rebuffed by former support

Price & Time Analysis: USDJPY

https://media.dailyfx.com/illustrati..._Picture_3.png

• USD/JPY bounced from Gann suport around 118.40 at the start of the week
• Our near-term trend bias is lower while below 121.00
• A move under 118.40/20 needed to set off a more important move to the downside in the exchange rate
• A very minor turn window is eyed early next week
• A close over 121.00 would turn us positive on USD/JPY

USD/JPY Strategy: Like the short side while spot remains below 121.00

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/JPY	117.40/20	19.10	119.40	119.80	121.00

Price & Time Analysis: GBPUSD

https://media.dailyfx.com/illustrati..._Picture_2.png

• GBP/USD rebounded sharply from the 38% retracement of the mid-April range at 1.4865
• Our near-term trend bias is higher in the pound while over 1.4865
• The 50% retracement of the February/April range at 1.5060 is a key pivot with traction above needed to set off a more important leg higher
• A very minor turn window is eyed tomorrow
• A daily close below 1.4865 would turn us negative on Cable

GBP/USD Strategy: Like the long side while over 1.4865

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
GBP/USD	1.4865	1.4930	1.5030	1.5060	1.5120

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

More...

GBP/USD started a sharp falling. I think it makes sense to play short till 1.469. I'll open the deal at 1.4975 with stop-loss at 1.4985

https://charts.mql5.com/7/630/gbpusd...apital-ltd.png

Talking Points:

• GBP/JPY Technical Strategy: Flat
• Support: 179.94, 178.74, 177.26
• Resistance: 181.14, 182.62, 185.01

The British Pound resumed its push higher against the Japanese Yen after a brief bout of consolidation, with buyers aiming above the 181.00 figure. Near-term resistance is at 181.14, the 61.8% Fibonacci retracement, with a break above that on a daily closing basis exposing the 76.4% level at 182.62. Alternatively, a turn below the 50% Fib at 179.94 clears the way for a challenge of the 23.6% retracement at 177.26.

Attachment 13105

The available trading range is too narrow to justify entering a trade on the long or short side from a risk/reward perspective. With that in mind, we will remain flat for now, waiting for price action to offer a more compelling opportunity down the road.

Attachment 13104

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...

• GBP/JPY Technical Strategy: Flat
• Support: 182.24, 180.96, 178.80
• Resistance: 184.03, 186.20, 189.70

The British Pound may be topping below the 185.00 figure against the Japanese Yen anew after forming a bearish Evening Star candlestick pattern. A daily close below rising trend line support at 182.24 exposes the 23.6% Fibonacci expansion at 180.96. Alternatively, a reversal above the 61.8% Fib retracement at 184.03 opens the door for a test of the 76.4% threshold at 186.20.

Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain flat for now.

https://media.dailyfx.com/illustrati...Picture_12.png

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


More...