GBP/USD Rebound Targets Major Resistance Ahead Of BoE

GBPUSD Daily

Technical OutlookThe decline off Friday’s high reversed sharply just pips ahead of support at the December 3rd low-day close. The subsequent rally has taken out the weekly opening range high and keeps our focus weighted to the topside targeting a more significant resistance confluence at ~1.5219/40. Subsequent resistance objectives are eyed at the 200DMA and the 1.618% extension at 1.5383.

Support rests with the lower median-line parallel (red) backed by our bullish invalidation level at 1.4950. A break below this mark shifts the focus towards a major Fibonacci confluence at 1.4847/58. As we approach the holidays and thus illiquid markets, it’s worth reviewing principles that help protect your capital. We call these principles the “Traits of Successful Traders.”

GBPUSD 30min

Notes: Sterling has been trading within the confines of a well-defined embedded ascending pitchfork formation with our immediate bias weighted to the topside while above 1.5114/18. Interim resistance stands at 1.5200/18 backed closely by the upper median-line parallels. A breach above these levels would suggest that a more meaningful reversal is underway in the pound with subsequent targets eyed at 1.5272&1.5318.

A break below 1.5114 would invalidate our near-term outlook with such a scenario eyeing targets into the lower median line. The broader bullish invalidation level remains with the December low-day close at 1.4949. A quarter of the daily average true range (ATR) yields profit targets of 25-28pips per scalp. Added caution is warranted heading into the close of the week with the Bank of England (BoE) Interest Rate Decision on tap for tomorrow and US Retail Sales data on Friday likely to fuel volatility in their respective crosses.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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