GBP/USD Retesting Broken Support as Resistance After NFP Drop

in forex •  2 months ago 

GBP/USD Key Points

  • Higher time frame GBP/USD wedge.
  • Higher time frame support zone broken and retested as resistance.
  • Intraday retest just missed, but the level is there if you're aggressive.

GBP/USD Technical Analysis

Morning team,

Sometimes I get immersed in the narrative of just a few markets and these last few weeks have been all about the majors. I'm really enjoying analysing market levels and then seeing the way that price reacts to and around these levels. I also know from the emails I've been receiving, those of you that are making money off them are certainly enjoying the never ending narrative as well!

So here we are back with some further GBP/USD analysis. Do you remember the GBP/USD wedge breakout that we have been following? If not, click the link or check the extract below for a refresher:

190703-gbpusd-h4.png

You can see that after breaking out of the wedge, retesting it and giving us a nice little long, that price has since continued lower in the direction of the original trend.

When price approached the GBP/USD key horizontal support zone, I was looking to buy. But a better than expected NFP print out of the US put bed to that zone and price went straight through it. Take a look at the price action on the updated hourly below:

190709-audusd-h1.png

You can see that price stalled at the zone, confirming its significance, but went through it in the session leading up to NFP on Friday. The number then beat expectations and price retested the previous support zone, this time as resistance and dropped like a rock.

That little hourly bullish candle on the retest before NFP however, can be used as our short term zone where we can manage our risk around. Frustratingly, price has tried to retest the zone and just missed it by a few pips, before continuing lower again.

I'm not sure if we've missed the boat here, but that's the intraday level that I'm watching to potentially trade around.

Best of probabilities to you,

Dane.

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