Trade view /
05 June 2017 at 6:58 GMT
I have taken a GBPUSD long this morning. I like this both from a technical and a fundamental standpoint. I have long been an advocate for a Conservative election victory on June 8, and think that prime minister Theresa May’s harder stance on terrorism in her Sunday speech will bolster her flagging ratings in the polls and give GBP a boost it needs. Technical outlook below.
Weekly – As far as Elliott wave is concerned, we regard the bearish fifth wave to now be complete. We are now in the corrective formation higher.
Daily – Moving higher in a corrective channel formation. We have seen a retest of 1.2773, which was resistance from December 6, now becomes support. An AB=CD formation would take the pair to 1.3250. However, with bespoke resistance not seen until 1.3536 and the 161.8% extension level (from 1.1495-1.2773) seen at 1.3557, this is our favoured long-term target area.
Intraday (120 minutes) – We have seen two ‘inside solders’ posted on the daily chart (indecision). However, the intraday chart looks to be forming a bullish flag or pennant formation. Although a break of 1.2905 is needed to confirm the intraday formation, with a Demark 13 (exhaustion) posted from the low and a gap still left open overnight (gaps have a tendency to get closed), I am happy to be long at current levels.
Management and risk description
Long GBPUSD at 1.2870
1.2810 (below the flag support)
intraday (flag breakout target 1.2980), medium-term 1.3500
— Edited by John Acher
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