Welcome to our newest feature; DecaPip. The concept is simple: our professional market technician, with an exceptional system, showcases his own daily Support and Resistance levels across a broad spectrum of FX currency pairs. The most effective way to use the levels are:
- If indicated levels hold, look for the price to reverse.
- If levels are broken, look for the price to continue past to new highs or lows.
In this edition of DecaPip Daily I would like to take a closer look at the GBPUSD as we approach Thursday which has no less than 6 high impact data releases on the same day and then shortly after a highly anticipated speech from BOE Governor Carney.
From a traders perspective they will be listening intently to the Carney speech for hints as to whether the BOE may hike it’s interest rates any time soon and also traders will be waiting for any changes on the MPC voting stance.
With this is mind and given how GBPUSD has been lackluster in finding a clear direction lately,seemingly selling off from the daily high points and buyers stepping in at the bottom of the daily ranges, it is advisable for us to take a look back at a higher time frame chart for key historical levels should we get some good movement Thursday.
For me this Weekly chart below is the most important GBPUSD chart.
We can see it is essentially trapped between a longer time frame wedge formation on the Weekly chart and a heavily inclining recent support below.The top line at 1.5734/5 is really the key level here for the upside and if we see a higher time frame close above this area traders may buy into it heavily.
If we however break to the downside and go below 1.5570 support it may encourage sellers to try to take it lower to the bottom of the wedge pattern at 1.5250.Realistically ahead of Thursday how much follow through we get on these moves is certainly debatable as real money may be on the side lines waiting for the relevant data points to be released.
Below we can see a more recent GBPUSD chart on the Daily time frame.
This really depicts more wedge formations and even a triangle formation so we can expect the break when it comes to be substantial on GBPUSD as these patterns tend to really explode in the intended direction when they do break.
For me the best way to trade this is simply to watch the 1.5666 level to see how it holds and any break will probably lead us into the 1.5734.35 which needs to hold firm.
For a buy entry 1.5250 is the most attractive which however seems rather far away at present.On Thursday itself I would be cautious on the news spikes in either direction especially if we are trading close to the aforementioned levels.
Got any questions about our new DecaPip feature? Contact Nathan at Nathan@littlefishfx.com
All comments, charts and analysis on this website are purely provided to demonstrate our own personal thoughts and views of the market and should in no way be treated as recommendations or advice. Please do not trade based solely on any information provided within this site, always do your own analysis. For more information please see our full disclaimer in the footer below.