Thoughts on the GBP this morning...
UK inflation data came in hotter than expected on Tuesday, sparking another wave of buying. Price ran through offers at the H4 Quasimodo resistance level plotted from 1.3245, and ended the day extending to a high of 1.3299. With the 1.33 handle lurking within touching distance at the moment, could this number be enough to halt further buying today? Through the lens of a simple technical trader, this is very unlikely. Why? Well, over on the daily timeframe, we have a reasonably clear run north up to a channel resistance extended from the high 1.2903. Furthermore, a little higher up on the curve, weekly price appears poised to challenge a Quasimodo resistance at 1.3371.
Basically, there is little overhead resistance seen on the bigger picture right now.
Suggestions: With both weekly and daily price showing promise to the upside, taking a short on the basis of a round number on the H4 scale would not be something we’d label high probability.
Apart from the option of selling from 1.3371, one could, however, also look to buy up to this region AFTER a H4 close has been seen beyond 1.33. A retest of this number as support, followed up with a reasonably sized H4 bull candle, preferably in the shape of a full, or near-full-bodied candle, would be ideal.
Selling from 1.3371 on the other hand, given that it is a weekly level that converges with a daily channel resistance, would not require additional confirmation, in our view. Simply set a pending sell order at 1.3371, with a stop plotted above the Quasimodo apex high at 1.3447. Yes, it is a rather large stop, but let’s remember at that point we would be dealing with higher-timeframe structures and therefore targeting higher-timeframe structures.
Data points to consider: UK Employment figures at 9.30am. US PPI data at 1.30pm GMT+1.
Basically, there is little overhead resistance seen on the bigger picture right now.
Suggestions: With both weekly and daily price showing promise to the upside, taking a short on the basis of a round number on the H4 scale would not be something we’d label high probability.
Apart from the option of selling from 1.3371, one could, however, also look to buy up to this region AFTER a H4 close has been seen beyond 1.33. A retest of this number as support, followed up with a reasonably sized H4 bull candle, preferably in the shape of a full, or near-full-bodied candle, would be ideal.
Selling from 1.3371 on the other hand, given that it is a weekly level that converges with a daily channel resistance, would not require additional confirmation, in our view. Simply set a pending sell order at 1.3371, with a stop plotted above the Quasimodo apex high at 1.3447. Yes, it is a rather large stop, but let’s remember at that point we would be dealing with higher-timeframe structures and therefore targeting higher-timeframe structures.
Data points to consider: UK Employment figures at 9.30am. US PPI data at 1.30pm GMT+1.
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