British Pound Testing Yesterday Low

After three days of going down gbp/usd is testing yesterday’s low and it might hold this time. GB Gross Domestic Product data came out exactly as expected both annual and quarterly figures being the same as predicted. This did not stop cable from falling down. It rallied initially on the numbers, but later collapsed and is now breaking or trying to break 1.5370 level. We need to wait for hourly candle close to be surer whether the breakout is a convincing one or a false one. 

It seems to me that some profit taking on US dollar longs should be taken before the weekend and so we may see greenback giving up gains. Resistance is seen around even number of 1.5500. No more serious data is scheduled from Great Britain or US. Traders will watch numbers from Europe at 12:00 GMT when German Consumer Price Index data comes out. This will have more impact on eur/usd and possibly eur/gbp pair. I do expect Euro Pound pair to erase its gains after strong rising since 18^th of August. 

US Personal Consumption Expenditure, Personal Income and Personal Spending come out at 12:30 GMT, but the data will probably not impact any of the above mentioned currencies much. 

Euro reverses above Asian session highs

Despite morning star formation eur/usd pair went above Asian session highs and reversed. A tiny pin formed on 15 minute chart indicating some selling pressure coming near 200 ema, but that was not very strong signal to sell so I did not take any action on that. 

You may also see that Euro is not exactly going down below today’s low. If it stays above 1.1060 level throughout European session and forms a reversal pattern I might attempt a small long around 1.1070 level with a stop below 1.1050. 

The technical picture is not that clear with Euro as it is with British Pound, which is soaring on positive UK CPI data. We will probably have to wait for news from US to see whether rate hike is contemplated in the heads of FED guys or not. 

If not, not only Pound, but Euro also will rise versus US dollar. Next level of resistance for Euro is 1.1100 area. We have even number there and 200 sma on 15 minute chart. These should stall any Euro advance for today. 

Intra day trend is slightly bullish if above 1.1050. Pound/US dollar pair is clearly a better instrument for day trading this week. 

Euro reverses above Asian highs

Dollar bulls break Pound

Dollar bulls have been beating Pound since the start of European session. However, gbp/usd has gone around 100 pips for today and that is close to average daily range for the pair. Another point in favor of a reversal is that the pair has just reached and went a little beyond Friday’s lows. From daily perspective that is an extreme point and a bounce is highly likely. 

One more point in favor of a reversal upwards is the fact that most moves in major currency pairs stall around 16:00 GMT when big market sharks take their profits for the day or even reverse their positions. So, I assume the low for today has been made and now we need to wait for some candle reversal pattern. 

Oh, yes. I almost forgot one more point that supports my idea about gbp/usd turning around and starting rising! It now sits on 200 sma on 1 hour chart. That is a strong argument for closing all shorts and contemplating a long. Let’s wait some 45 minutes to get some confirmation whether big short positions are being closed or not. Next support level is just 5 pips lower at 1.5575. 

British Pound reaches and breaks Friday’s low

American session may see gbp/usd bottoming

After false breakouts in both directions of Asian session and then a collapse during European session gbp/usd pair may be bottoming. This is not for sure yet, but the signs are there.

We do see the pair making lower lows, but each low now is not far from the previous one. There have been a number of bullish pins, but those failed to have a follow through upwards. All in all, we see 4 pushes downwards. There might be another one, but you have to bear in mind that Pound is in a short term uptrend.

If you look at 30 minute Pound chart you will see more support lying ahead. 200 sma and ema are at 1.5610 level, which I expect to hold today. The pair has fallen 67 pips as of now and this might be the end of it. 

Key support (if 1.5610 is broken) is in 1.5587 level (the low of August 14). There is no need to hurry entering longs before clear signal of reversal is made. I do wait for a few bullish pins that do not exceed the low of the day or a W on 15 minute chart. 

4 pushes to the lows on 15 minute chart

gbp/usd searching for direction

After a few days of rise (well, from Monday to Wednesday) gbp/usd got stuck somewhat yesterday. It will probably search for direction today. It is highly probable that Pound will continue rising today. I marked support and resistance levels on the chart. We may assume that at these levels manipulation will take place, but that is not definite. We need to see what happens when price reaches those levels. I do expect some reversal pattern to develop as market liquidity providers will try to trigger buy stops above the resistance points or sell orders below the marked support level. 

Of course, you can also see from the chart that Asian session high and low has already been manipulated. Well, to tell the truth, Asian session low was broken and rejected. Price is working above the high of Asian session at the moment. It is also likely that the push above the high was false. Therefore, I do think we need to go to either support or resistance point and wait for a reversal there. By reversal I mean some candle reversal pattern. I will introduce those in my future points, but you can look at previous day’s low to see how a reversal pattern looks like. 

gbp/usd important support and resistance points on 15 minute chart