Interesting price action observes on cable, traders...
The pound received fresh impetus on Brexit-related momentum during yesterday’s session, amid news the UK may be considering an Irish border compromise on customs to facilitate a deal with the EU. H4 movement, as you can see, hit highs of 1.3115, momentarily exploring levels beyond supply at 1.3090-1.3072 and the 1.31 handle.
Despite the above, Cable ended the day a handful of pips above where it started: beneath H4 resistance at 1.3043.
In terms of where we stand on the bigger picture, the weekly timeframe concluded last week forming a bearish pin-bar pattern that marginally closed beneath support at 1.3047 (now acting resistance). This – coupled with a second-rate recovery from demand at 1.2589-1.2814 over the past month (indicating weakness from the buy-side of this market) – could see the unit retest the noted demand with force this week.
Daily candles remain in the process of printing a nice-looking AB=CD bullish correction pattern (black arrows). Pattern completion, however, in our humble view, does not occur until we reach 1.2927 (green zone): its 161.8% Fib ext. point (frequently labelled an AB=CD alternate pattern). What’s also notable from a technical perspective is the trend line support seen intersecting with this region (taken from the low 1.2661).
Areas of consideration:
Technically speaking, 1.30 continues to emphasize a fragile state. Aside from 1.3043: the H4 resistance seen stationed nearby, we also have to take into account both weekly and daily flow suggests further downside may be in store for the time being.
With this in mind, two tradable scenarios remain in the offing:
1. Simply watch for 1.30 to be taken out. A H4 close beyond this number that’s followed up with a retest in the shape of a bearish candlestick formation would likely be enough evidence to suggest further selling towards H4 demand at 1.2896-1.2931. Stop-loss orders and entry are dictated by the candlestick structure selected.
2. The H4 demand, aside from being a take-profit target for shorts, is also a zone worthy of longs. Not only does it house September’s opening level at 1.2911 and the 1.29 handle, it also converges with the daily AB=CD termination point marked in green at 1.2927. Collectively, this is likely enough confluence to produce a bounce, at the very least.
Today’s data points: UK construction PMI; FOMC member Quarles speaks; Fed Chairman Powell speaks.
Despite the above, Cable ended the day a handful of pips above where it started: beneath H4 resistance at 1.3043.
In terms of where we stand on the bigger picture, the weekly timeframe concluded last week forming a bearish pin-bar pattern that marginally closed beneath support at 1.3047 (now acting resistance). This – coupled with a second-rate recovery from demand at 1.2589-1.2814 over the past month (indicating weakness from the buy-side of this market) – could see the unit retest the noted demand with force this week.
Daily candles remain in the process of printing a nice-looking AB=CD bullish correction pattern (black arrows). Pattern completion, however, in our humble view, does not occur until we reach 1.2927 (green zone): its 161.8% Fib ext. point (frequently labelled an AB=CD alternate pattern). What’s also notable from a technical perspective is the trend line support seen intersecting with this region (taken from the low 1.2661).
Areas of consideration:
Technically speaking, 1.30 continues to emphasize a fragile state. Aside from 1.3043: the H4 resistance seen stationed nearby, we also have to take into account both weekly and daily flow suggests further downside may be in store for the time being.
With this in mind, two tradable scenarios remain in the offing:
1. Simply watch for 1.30 to be taken out. A H4 close beyond this number that’s followed up with a retest in the shape of a bearish candlestick formation would likely be enough evidence to suggest further selling towards H4 demand at 1.2896-1.2931. Stop-loss orders and entry are dictated by the candlestick structure selected.
2. The H4 demand, aside from being a take-profit target for shorts, is also a zone worthy of longs. Not only does it house September’s opening level at 1.2911 and the 1.29 handle, it also converges with the daily AB=CD termination point marked in green at 1.2927. Collectively, this is likely enough confluence to produce a bounce, at the very least.
Today’s data points: UK construction PMI; FOMC member Quarles speaks; Fed Chairman Powell speaks.
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