Sterling Is On Track To Test Resistance At 1.3050/90
Axi | Apr 28, 2017 11:47
Originally published by AxiTrader
While the yen has remained under pressure and the euro has dropped back over the past few days the British pound has quietly be grinding higher once again and is on track to the 1.3050 region I identified as resistance a week or so back.
But this region is stacking up as a multi-time frame cluster of significant resistance so it's unlikely GBP/USD can get through it anytime soon.
To recap, back on the 20th of April I wrote that the GBP/USD was headed to 1.3050 once this consolidation has finished. And as readers know it is usual for me to consider a garden variety 38.2% retracement as a garden variety move after a sharp advance or decline in prices.
So it's worth noting the recent low was almost exactly on the 38.2% retracement level - 1.2756 - of the big 3-day rally we saw between April 18 and 20. And now that GBP/USD has traded to the higher of that move at 1.2905 we look for the extension to the 138.2% level at 1.3054.
That level also happens to be in the vicinity of the 38.2% retracement level of the Brexit high-low move which comes in at 1.30575 and also in the vicinity of the 23.6% (minor) Fibo level of the 2014-2016 selloff for Sterling which comes in at 1.30916.
So even though the pound is breaking higher I'm expecting formidable resistance up at those levels.
Here's the chart:
Support remains solid at 1.2750/60 on the dailies. But I do confess to looking at them and seeing them a little stretched. ON the 4 hour charts 1.2830/40 needs to hold otherwise this upside pulse would be aborted for now.
Have a great day's trading.
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