Talking Points
GBPUSD reversal approaches initial key support target
Updated targets & invalidation levels
Event Risk on Tap This Week
GBPUSD Weekly
GBPUSD Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPUSD in the process of marking outside weekly reversal candle off the monthly high- bearish
Interim support confluence at 1.5447/59 backed by key support at 1.5332/58
Subsequent support at 1.52187/46
Key resistance at 1.5630- bearish invalidation
Daily RSI support-trigger break- bearish
Look for momentum support at 40- break below would reinforce short-bias
Key Event Risk on Tap- US 2Q GDP revision tomorrow and Carney Speech at Fed Symposium & UK 2Q GDP revision on Friday
GBPUSD 30min
Notes: The pound has fallen more than 2.2% off the highs with the reversal broking the weekly opening range low as intraday momentum moved to its lowest levels since early July. Today’s decline marks the third largest this year with the sell-off now approaching the first region of key technical support at 1.5448/62. The immediate short-bias is at risk above this region with interim resistance seen at 1.5528 backed by our bearish invalidation level at the highlighted region into 1.5580.
Bottom line: We’ll be looking for to sell rallies / short triggers while below weekly trendline resistance with a breach above needed to shift the focus back towards the 1.57-handle. A break below support this targets subsequent objectives at 1.5420 backed by the July low-day close at 1.5358 & 1.5331. A quarter of the daily average true range (ATR) yields profit targets of 28-31pips per scalp. Caution is warranted heading into US & UK event risk later this week with the release of the 2Q GDP revisions and ongoing commentary form the Jackson Hole Fed Symposium likely to fuel added volatility in USD & GBP crosses.
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Relevant Data Releases
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—Written by Michael Boutros, Currency Strategist with DailyFX
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Source: Daily fx
