GBPUSD - Looking to sell the retest (channel breakout)

Ian Coleman FXStreet

Technical

Monthly: Moved higher from the 2016 low of 1.1905. Levels close to be bespoke resistance at 1.4390 found sellers. Aprils price action formed bearish Outside Bar, often an indication that the rally (correction) has come to an end.

Weekly: After completing a bullish Elliott Wave pattern (5-waves) a bearish Outside Week was posted from the high (1.4377). Three consecutive negative weekly performances have resulted in GBPUSD breaking the channel formation to the downside. Reverse trend line resistance is located at 1.3740.

Daily: The strength and speed of the decline has resulted in signals for sentiment being at oversold extremes. Yesterdays price action highlights an Inside Harami Candle, a clear indication of investor indecision. There is ample scope for a corrective move higher. Four reasons why we look for the move higher to be limited:

Previous support now becomes resistance at 1.3711
Bespoke resistance is seen at 1.3700
Reverse trend liner resistance is located at 1.3740
23.6% pullback from the 1.4376-1.3487 is located at 1.3697

Action:

We look to Sell at 1.3700

Stop: 1.3900

Targets: 1.3130 and 1.2850

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Author

Ian Coleman

FXStreet

Ian started his financial career at the age of 18 working as a Junior Swiss Broker at Godsell Astley and Pearce (London). He quickly moved through the ranks and was Desk Manager at RP Martins at the age of 29.

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