FPM Technical Analysis : GBP/USD 4 March 2020

FPM Technical Analysis : GBPUSD (4 March 2020)

Monthly timeframe:

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

Early February 2018 saw the pair reject 1.4520/1.3893, a 50.0% retracement and 38.2% Fibonacci retracement combination (red). This, along with trendline resistance (2.1161), remains a well-rounded resistance area to keep an eye on long term.

In recent months, a recovery formed off 1.1904/1.2235, clocking highs of 1.3514 in December 2019 and breaking the 1.3380 March 2019 high. The month of February, however, declined nearly 3.00%.

Daily timeframe:

Partially altered outlook from previous analysis –

Demand formed at 1.2649/1.2799 entered view in recent movement, refreshing YTD lows at 1.2725. Traders will note this area held price higher on two occasions, once in October and again in November (2019), and is potentially confirmed by the RSI heading towards oversold levels.

The 200-day SMA also resides within the current demand zone, circulating around 1.2695.

North of price we have a local trendline resistance (1.3514), with supply seen at 1.3303/1.3184 in the event we travel further north this week.

H4 timeframe:

Partially altered outlook from previous analysis –

H4 demand-turned supply at 1.2806/1.2833 remains a reasonably dominant fixture on this timeframe, capping upside, while 1.2718/1.2751, an area comprised of 161.8% Fibonacci ext. studies, continues to cap downside. This area is also housed within current daily demand.

1.2806/1.2833 may continue to offer the market a platform of resistance this week, having seen its history as an area of support. In the absence of this, though, follow-through buying to relatively dominant supply at 1.2868/1.2894 is possible.

H1 timeframe:

Technically, we’re holding 1.28, though struggling to gain traction thanks to the 100-period SMA capping upside. Interestingly, as underscored in yesterday’s analysis, 1.2850 still offers a particularly attractive area of resistance, bolstered by a trendline support-turned resistance (1.2849), a 61.8% Fibonacci retracement at 1.2861 and a 50.0% retracement at 1.2870. Traders are, however, urged to pencil in the 127.2% Fibonacci ext. point at 1.2888 (brown line), and 1.29, in the event the zone fails.

Structures of Interest:

Daily demand at 1.2649/1.2799 could hold price higher this week, reinforced by the 200-day SMA.

While longer term we’re trading from demand, a successful retest at the underside of 1.2870/1.2850 on the H1 could occur. In light of its confluence, this could draw 1.28 back into view as an initial downside target, with a break possibly driving for 1.2750.

Disclaimer: The information contained in this material is intended for general advice only.