Forex Trading Library

GBPUSD – Dip buying offers good risk/reward

1 248

Monthly: Moved higher from the 2016 low of 1.1905. Levels close to be bespoke resistance at 1.4390 found sellers. Aprils price action formed bearish Outside Bar, often an indication that the rally (correction) has come to an end. Follow through selling pressure has resulted in GBPUSD trading to the lowest level in 8 months. Reverse trend line support is located at 1.2660

Weekly: After completing a bullish Elliott Wave pattern (5-waves) a bearish Outside Week was posted from the high (1.4377). Levels close to the 50% pullback of 1.3133) have found buyers. We now look for the first corrective leg lower to be complete (AB)

Daily: Posted a DeMark 13 (exhaustion) count on the daily chart. Although the selloff passed the 261.8% extension of 1.3176 (from 1.4377-1.3918), we look for this to be a 5th wave extension (Elliott Wave). Bullish divergence can be seen on the daily (the chart makes a lower low while the oscillator makes a higher low), often a signal of exhausted bearish momentum, or at least a correction higher. We have broken the Ending Wedge formation to the upside. Reverse trend line support is located at 1.3095. The measured move target for the wedge is 1.3440. Bespoke resistance is located at 1.3440

Intraday (3-hours) – There is scope for a deeper correction:
1. Channel support is located at 1.3160
2. 61.8% pullback level located at 1.3169
3. AB=CD formation 1.3138
Buying a dip in this zone with a stop back inside the daily wedge offers a good risk/reward setup.

Leave A Reply

Your email address will not be published.