Day trade
Trade view / 18 July 2016 at 10:07 GMT

GBPUSD bias is bearish...for now

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

The USD Index is sitting within a channel formation. This can be seen as a bullish flag that has a bias to break to the upside, and dips are to be bought.  

The immediate bias in GBPUSD is bearish, but the downside could be limited. Tomorrow's CPI (Consumer Price Index) could put a temporary bounce into sterling. Here is what we see:

Monthly – The longer timeframe is seeing some dip buying close to the 78.6% pullback level of 1.2673. We can see no technical reason for a change of trend over the long term. 

GBPUSD chart
 Source: Saxo Bank

Four hour – This timeframe highlights a bullish five-wave pattern (Elliott wave). Corrective sequences are normally in three legs, so this could be part of a correction higher, the AB leg of an AB=CD corrective formation. 

A move lower and we have strong support at 1.3058. This is the 61.8% pullback of the last rally and trend line support, possibly forming the right shoulder of a bullish reverse Head-and-Shoulders pattern. 

 Source: Saxo Bank

30 minutes – Shorter timeframes highlight the pair moving higher in a corrective channel formation. Trendline resistance is seen at 1.3320. We have bespoke resistance at 1.3320, and the previous swing's high at 1.3337. This area is also between the 50 and 61.8% pullback levels at 1.3306 and 1.3347 respectively.

 Source: Saxo Bank

This is our prime area to get short, but the call is only for today. If we get a rejection of the dip after tomorrow's CPI, then our medium-term bias will turn temporarily bullish. 

Correlation – It should also be noted that we are looking for a larger correction lower in EURGBP. 

 Source: Saxo Bank

Management and risk description

If the trade is onside running into tomorrow's CPI, we will look to move the stop to entry.

Entry: selling at 1.3320.


Target: 1.3055.

Time horizon: trigger today only. Target within two days (over or before the CPI figures). 

— Edited by D. Deacon

Non-independent investment research disclaimer applies. Read more
HaythamSabry HaythamSabry
what do you think of EUR/USD?
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
selling at 1.1079 today


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail