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Short term
Trade view / 29 August 2016 at 9:45 GMT

Outside Bar at Triangle Top keeps focus negative in GBPUSD

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

USD Index – Trading was choppy trading on Fed chief Janet Yellen’s press release on Friday but the end result was dollar buying and a bullish Outside Day being posted at the channel base. This correction looks like it is still underway and intraday dips are likely to be bought into. The medium-term to long-term picture is now unclear and US data releases will be closely watched and hold the key. 
 
USD Index
Source: Saxo Bank 

We are going to look at GBPUSD today. 

Monthly – We are likely to post an indecisive Inside Month for August as the pair consolidates just above the 78.6% pullback level of 1.2673 (from 1.0362–2.1153). However, the pair failed to post gains above the previous swing low of 1.3501 (January 2009), offering a mild bearish bias. The focus on the long-term (year end and possibly beyond) is the Fibonacci confluence area at 1.1593–1.1409. 

GBPUSD M
Source: Saxo Bank 

Daily – Probably the most important formation. We have consolidated in range for the last 45 (trading) days. This has, in turn, formed a consolidating triangle pattern. Gains were rejected close to the trend of lower highs on Friday while posting a bearish Outside Day. The base of this formation is seen at 1.2870.

GBPUSD D
Source: Saxo Bank 

There is scope for a mild correction as Demark has posted an intraday 9 count. With this in mind we look to sell into rallies today. Prime resistance is at 1.3150.

Management and risk description

Parameters

Entry: Selling at 1.3150

Stop: 1.3250

Target: 1.2870

Time horizon: 5-10 sessions

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more

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