Sellers, overall, appear to be in the driving seat...

6 mag 2020

GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Although March clocked levels not seen since the 1980s, ahead of a 127.2% Fib ext. level at 1.1297, price staged an impressive recovery and regained approximately 80% of the month’s losses.

Support at 1.1904/1.2235 remains in play in early May. Neighbouring resistance can be seen in the form of a trendline (1.7191).

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.

Daily timeframe:

Partially altered from previous analysis -

Upside momentum recently diminished as the pair crossed paths with the 200-day simple moving average (SMA) at 1.2646, a value that boasts a close connection to a demand-turned supply at 1.2649/1.2799.

Extended loss was observed Wednesday, wiping nearly 100 pips and lining up demand at 1.2212/1.2075 as a possible target today.

H4 timeframe:

Brought forward from previous analysis -

Resistance at 1.2624 has contained upside since mid-March.

Demand at 1.2399/1.2453 entered play in recent trade, though lacked any real oomph, leading to price action bringing in demand from 1.2297/1.2350 yesterday, together with trendline support (1.2163).

Technicians will also note a large demand is presented between 1.2147/1.2257.

H1 timeframe:

Sterling found itself compressing within two converging trendlines on the H1 timeframe in recent trade, forming a rising wedge pattern (1.2405/1.2475). London hours Wednesday had price action firmly break the lower boundary of the said pattern, using the underside of 1.2450 as resistance.

Price shattered 1.24 and also the small demand at 1.2379/1.2393 sited under it. Price, however, swiftly turned off lows at 1.2358 and retested the aforementioned demand as supply, before heading for the 1.2350 neighbourhood.

1.23 is seen as the next support target on this timeframe.

Structures of Interest:

Monthly price exhibits scope to approach 1.2235 (the top edge of support); daily price also suggests the possibility of a move to 1.2212 (the top edge of demand).

H4 action has the potential to hamper downside out of demand at 1.2297/1.2350/trendline support. H1 flow, nevertheless, has eyes for 1.23.

Technically, the current H4 demand is on precarious ground as sellers, overall, appear to be in the driving seat. Intraday bearish scenarios, therefore, could be worth exploring.