Similar to its bigger brother the EUR/USD
, the GBP/USD
also rallied on broad US dollar
weakness yesterday along with a better than expected UK CPI
print. For those who read our previous report on this pair you may recall our team felt a bounce higher from the 1.2864/1.29 (Quasimodo support/round number) region was likely on the cards, due to price residing within a daily demand at 1.2789-1.2928 which united with a larger H4 harmonic Gartley
reversal zone fixed between 1.2864/1.2935 (green zone). In regards to entry, we mentioned to watch for a close above 1.29 followed by a retest. If you look down to the M30, you’ll see this played out perfectly. Well done to any of our readers who managed to net this move as price recently connected with the second and final take-profit target at 1.3064-1.3109: a H4 resistance area
As we have mentioned in previous reports, we only expected a bounce from the above noted buy zone, and this is what we got. With that, what’s likely in store for this market today and possibly into the week?
Well, we’re expecting 1.30 to be retested today. This is a key number for us since a break below this level could prompt further selling down to the 1.29ish region and beyond, as let’s not forget that the weekly timeframe
shows little support until around the 1.20 region (visit 1986). Therefore, the best approach, in our view, going into today’s sessions will be to watch how price responds to 1.30. A break below here followed by a retest and a lower timeframe sell signal is, in our opinion, enough to condone a short entry with a an initial target objective at 1.29.