The morning’s attempt in GBPUSD to break higher has failed and resulted in a sharp decline to test the short-term uptrend.
I was stopped out on a long but managed to close the trade with a minor loss. I entered at bar#1 on a 38.2% pullback, closed half of the position at the entry level, stopped the rest at the initial risk level.
EURUSD: 4h trend is bearish, the pullback against the trend is testing the resistance made up by prior swing lows but yet to reach the 38.2% fibo level. Waiting for a test and failure on the upside.
GBPUSD: the 4h trend is down but the significant overlap of the price waves suggest a consolidation rather than a trending phase while the bullish trendline is still intact. I rather play a bullish 1-2-3 reversal on the 4h timeframe.
EURGBP: the 4h trend is down, waiting for a test of the 38.2% fibo level for a reversal the the downside.
GBPUSD: Friday’s high wave candle on the daily chart and the overlapping waves on the 4h timeframe indicate market indecision. I’ll wait for a breakout and pullback from the 1.6000-1.6200 range.
USDCAD: failed to hit new low below parity level, a fresh high above 1.0155 would change the short-term bias to bullish
EURUSD: new low below 1.3700, seems oversold therefore a swing up to a lower high is likely
GBPUSD: testing the 4h uptrend but the lower high makes the picture mixed
The daily and 4-hour timeframes are in agreement on the GBPUSD uptrend. We have a minor pullback from the 1.6300 top which is yet to test the 38.2% fibo level at 1.6052 however the bullish pin on the 4h chart with confluence of an important swing high (bearish pin bar on Oct.15) offers a setup for a long trade.
The GBPUSD is trading at a new high above 1.6100 which puts pressure on EURGBP which can post an A-B-C correction. The measured move target of this move is in the range of the bullish candle that broke above the previous swing high leaving the uptrend valid.
The price action still indicates an uptrend therefore I am still looking for a buy signal below 0.8600.
After a lower high on the 4h timeframe I started to prefer the downside in GBPUSD. I entered short yesterday on a pullback from the 1.5651 minor swing low but got stopped out this morning. Even though the 1d timeframe shows a possible break of the bullish trendline after a failure on the upside at 1.6000 there is no lower high yet therefore the price action trend is still bullish. In this context my short entry was too early.
Choppy consolidation in GBPUSD posts a lower low which also violates the current uptrend. The 4h timeframe shows a double bottom below 1.5700 signalling a move higher. I look to enter short on a sell signal below the 1.5879 swing high.
Both the Euro and the Pound are approaching important resistance levels on the 1d timeframe which may cap gains and resurrect the downtrend against the dollar. These levels are also near round figures which are 1.3500 for the EURUSD and 1.6000 for the GBPUSD.
Contrary to this above 1.3500 there is scope for 1.3820 on the EURUSD while the 1.600 level would open the upside for the GBPUSD to 1.6450.
The 0.86063 seems to be a big level for the EURGBP with three factors creating confluence: 50% fibo level of the 0.91495-0.80680 downleg, important swing low on Jan.28, measured move target of the most recent A-B-C corrective zigzag.
For this reason (ie. strong resistance) I may prefer the GBP over EUR when taking long position against the dollar.
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