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I’m going to get started today on the Greater British Pound versus the US Dollar [GBPUSD]. Starting on the Daily Chart, for several months now, we’ve been studying this uptrend, coming from the bottom left-hand side of the chart, all the way back down into the 1.4700s, climbing to the top right-hand side of the chart into the 1.6800-level.
Throughout the life of the trend, we’ve also been studying these three different distinct ranges that have developed or channels that have developed within the uptrend. I have them highlighted in orange. The first range quite a bit wider, as we see it challenging the 1.6250s or so. The mid-1.6200s. And the support within there was into the low-1.5900s. Then we moved on. It broke above there and moved into the second channel or range, bottoming out into the same mid-1.6200s, and then capping out into the upper-1.6500s, towards 1.6600, and that was the resistance within that second range.
And then we saw the breakout above there and a move all the way back into the 1.6800s, and now using the top resistance of the second range as support, so finding support now into the 1.6600-level and even into the mid-1.6500s, down towards 1.6550 for the GBPUSD right now. So, the green-shaded area holding as support. Green-shaded area is our resistance. Quite a bit higher than the current market. So, we’re still holding within our third and smallest of the three ranges here for the GBPUSD.
We also see two different trend lines here. The blue trend line, of course, representing the longer-term trend, connected to the lowest low and the low right before the highest high on the chart. And then of course I have a second trend line. The red trend line connected with the low of the first range, coming back up here and connecting with the same low as the blue trend line, and we could see how both of those sit down here into the mid-1.6400s, up in towards the mid-1.6500. So, definitely some potential support along those trend lines. Support based on historical resistance into the 1.6600-level. And of course that clear price level. 1.6600 has the potential of finding support.
Now, over the past several days, we have seen our Forex Black Book trend bar at the very bottom of the chart green, so that of course implies a bullish bias. But it is dark green, showing that for a short period of time the bears have been in control, driving it from the top of the range, back to the bottom of the range. If we zoom it in here on the Daily Chart, you could see that range a little bit closer. How the last time we were here into 1.6600 and into the upper-1.6500s we took a bounce all the way back up into the 1.6700s. Now, here we are once again, challenging 1.6600 as support.
Again, here are our historical resistance levels here. Back into January and even back into December, we could see resistance into that same green-shaded area. Now that offers us some support.
Let’s take two different Fibonacci measurements here on the Daily Chart. Let’s go from the low down here where the red trend line starts to the current resistance high or the highest high on the chart. That puts the .236 fib right at 1.6593. And you could see that’s right at the top of the green-shaded area. There’s the dashed line. Top of the green-shaded area. That’s the .236 fib of the longest leg of the range that we’re seeing here.
Let’s also take Fibonacci from the current low right here where the two trend lines connect. The bottom of the most recent low we see to the current high. And in doing that, we find the .382 fib of that shorter range sitting at 1.6603. Again, right at the top of our green-shaded area. So, longest range. Shortest range. Both having Fibonacci overlapping right here around the 1.6600-level. So, highly likely that today we find support here and potential for buying on dips into this support and rallies back higher as we look for the market to hold within the range that we see here, similar to what it did the last two ranges.
So, let’s go ahead and put a couple of arrows here. We’ll find this on the 4-Hour Chart in a moment. Buying on dips into support is a possibility, as long as it holds within the green zone. A break of the green zone, we’re likely looking for it to challenge down to the next support, down here closer to the two trend lines and into the yellow-shaded area down closer towards the upper-1.6400s. As it challenges back higher, of course there’ll be likely resistance into the mid-1.6600s or possibly all the way back towards the 1.6700-level. The yellow-shaded area just above the current market.
Let’s go ahead and take that information down to the 4-Hour Chart. And as we get down here, there’s our same green-shaded area. I’m actually going to zoom it out a little bit so we could see this. There’s the same green-shaded area around the 1.6600-level. There is the Fibonacci levels. The dashed blue lines there right at the top of the green-shaded area. We can clearly see that this is a level of support for the GBPUSD today. As long as we hold within or above the green zone, potential for bounces and buys on dips into here. Looking for rallies back higher. A breakout underneath 1.6550, underneath the green-shaded area, likely looking for the continuation lower down here towards the yellow-shaded area at the bottom of the chart, where the two trend lines come into play.
Again, resistance. Purple-shaded area right into the mid-1.6600s. We’ve already seen a little bit of that over the past several hours. 1.6650 holding as resistance. A break back above that purple-shaded area, which is right around 1.6650, we take a push back towards 1.6700, into the next higher yellow-shaded area. That’s 1.6700. That also come into play where yesterday’s bank flow levels sat. You could see yesterday’s bank flow levels surrounding the bottom side of that yellow-shaded area, so that would also come into play if the market takes a rally back higher from 1.6600.
So, buying as close as you can. 1.6600. Upper-1.6500s. Looking to target back to the purple-shaded area or the yellow-shaded area. That’s the mid-1.6600s or 1.6700. Your risk of course is that it breaks 1.6555 and continues down towards the upper-1.6400s for the GBPUSD today.
