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Talking Points:
- The British Pound is showing messy near-term price action, making directional prognosis on shorter-term charts a bit of a challenge.
- Retail traders remain slightly net-short, with 1. 12 traders short for every one long, as of this writing .
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In our last article, we looked at a level of support for bullish plays in GBP/USD . That level came-in at 1.3320, and this is the 38.2% retracement of the August-September 2017 bullish move. Two weeks later, that price continues to hold support in the pair, and this is after three separate tests in the early-portion of December.
GBP/USD Two-Hour: Support at 1.3320 Remains , But Lows are Slipping
Chart prepared by James Stanley
Each recurrent test of that support appears to be creating a technical lower-low, and this may be preluding a deeper retracement in the pair. If we combine this with the near-term lower-highs that have shown-up, traders would likely want to be very careful if looking to buy at 1.3320 on a subsequent re-test.
Instead, support plays in GBP/USD can be directed to a deeper area on the chart. The levels of 1.3117 and 1.3216 could be helpful for such a purpose. At 1.3117, we have the 38.2% retracement of the 'Brexit move' in the pair, and at 1.3216, we have the 50% retracement of the August-September 2017 bullish move; and this is the same with which the 38.2% has been operable over the past two weeks.
Support in this zone opens the door for stops below the Q4 swing-low of 1.3026, targeting prior resistance at the 1.3477 Fibonacci level.
GBP/USD Daily: 2017 Bullish Channel Remains
Chart prepared by James Stanley
--- Written by James Stanley , Strategist for DailyFX.com
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
