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Day trade
Trade view / 20 July 2016 at 12:19 GMT

Bias turns bullish for GBPUSD

Analyst / PIA First
United Kingdom
Instrument: GBPUSD
Price target:
Market price:
Background

Looking at the USD Index, there are some interesting facts that could stall buying today.

Bearish:
  • 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)

Bullish:
  • No reversal patterns
  • Dips being bought
  • Outside week on June 23

USD Index: the immediate outlook is mixed
USD Index
 Source: Saxo Bank

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
GBPUSD M
Source: Saxo Bank 

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.

GBPUSD 4
 Source: Saxo Bank

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.


GBPUSD 4-1
 Source: Saxo Bank

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.

GBPUSD 15
Source: Saxo Bank 


Management and risk description
A move through 1.3481 and we look to move the stop to entry.

Parameters

Entry: buying GBPUSD at 1.3140.

Stop: 1.3050.

Target: 1.3747.

Time horizon: one week (today to trigger).

— Edited by D. Deacon

Non-independent investment research disclaimer applies. Read more
1y
brian1983 brian1983
just long cable too at 1.314 too.
1y
brian1983 brian1983
ya. u too.
1y
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
it is teasing us a lot !!!! my internet keeps dropping too so fun and games today
1y
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
just to let you know we have some resistance at 1.3271 and 84 (intraday)
1y
brian1983 brian1983
gbp looking gd. thanks for the call. will take partial profit at the resistance.
1y
brian1983 brian1983
do u mind if i ask why u set the target to be 1.3747. 1.35 shld be a v strong resistance to break. jud curious how u derive this target.

i do agree if judge by the recent data, gbp shld be bullish provided no cut in aug by boe.
1y
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
it is an AB=CD correction. We still have a GAP at 1.3660... Our indicators show no resistance at 1.3500 just at 1.3800
1y
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
we just need to break inside this cloud at 1.3200
1y
heavenlyguy heavenlyguy
Hi, what is the stop-loss for EURGBP? Thanks
1y
heavenlyguy heavenlyguy
Thank you
1y
PCA15 PCA15
1.32 just broken. why such a big move at this time?
1y
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
BOE'S FORBES: WAIT FOR BREXIT FOG TO CLEAR BEFORE RATE CUT --TELEGRAPH
1y
Amiqero Amiqero
Thank you Ian!
1y
brian1983 brian1983
thanks man. 1.326 already
1y
Thank you so much. Thank you so much.
Thanks Ian, 1.323 ready
1y
Qi2 Qi2
Nice call Ian!
1y
brian1983 brian1983
will the retail sales later today be able to push it beyond 1.33 today... hope so.
1y
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
Thanks all.... I am out of half
1y
vyacheslav111 vyacheslav111
Hi, Ian ! Your opinion on GBP| USD now ?

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