Trade view /
20 July 2016 at 12:19 GMT
Looking at the USD Index, there are some interesting facts that could stall buying today.
- We are close to the 61.8% pullback level of 97.27 (from 100.60 – 91.88)
- The last intraday wave higher can be seen to have completed a five-wave pattern
- Exhaustion count posted on the daily chart (stop a lot higher)
- No reversal patterns
- Dips being bought
- Outside week on June 23
USD Index: the immediate outlook is mixed
We have taken a EURGBP short today, and we will re-enter shorts around 0.8375.
It looks like the bias is turning for GBPUSD
too. Here's why:
Monthly – The long-term focus remains to the downside, with prime support seen at 1.5000. This is the Fibonacci confluence area (88.6% pullback and a 127.2% extension).
GBPUSD monthly chart
Four Hour – We have hit the trendline support at 1.3058, which is also the 61.8% pullback from the 1.2797 and 1.3481 move. This can be seen as a three-wave correction.
We have also possibly formed a bullish reverse Head and Shoulders. A break of 1.3481 would confirm this over the coming days. If the AB=CD formation plays out, the target will be 1.3747. If we get a Head and Shoulders breakout, the target is formidably higher. With bespoke resistance at 1.3800, we prefer the AB=CD correction call.
15-minute – Even this timeframe highlights a bullish five-wave pattern (Elliott wave). Our prime long entry for an intraday pullback is at 1.3137. With a stop below the day’s low, this offers a great risk/reward trade set-up.
Management and risk description
A move through 1.3481 and we look to move the stop to entry.
buying GBPUSD at 1.3140.
one week (today to trigger).
— Edited by D. Deacon
Non-independent investment research disclaimer applies. Read more