(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%.
Partially altered outlook from previous analysis –
Demand formed at 1.2649/1.2799 entered view at the beginning of the week, fading 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 has, this week, produced three successive bullish candles out of its base, poised to grip a local trendline resistance (1.3514), with supply seen at 1.3303/1.3184 in the event we travel higher.
The 200-day SMA also resides within the current demand zone, circulating around 1.2698.
Thanks to recent upside, the market witnessed the H4 candles power through supply at 1.2885/1.2921 and form a small fresh demand area at 1.2859/1.2875.
Sustained upside north of 1.2885/1.2921, now a serving demand zone, has supply at 1.3023/1.3006 in the firing range.
Sterling was largely a dollar story Thursday, overpowering 1.29 and retesting the latter as support in early US trade. 1.2950 nudged into view in recent hours, reinforced by a 78.6% Fib retracement at 1.2953.
Attractive supply rests nearby at 1.2998/1.2981, stationed a hair beneath the key figure 1.30. A break of the said barriers leads supply at 1.3041/1.3016 into sight. The RSI, a momentum oscillator, shows overbought conditions on this timeframe, dipping from a recent peak at 80.74.
Daily price approaching trendline resistance may sway traders from attempting to print another bullish close today. Instead, we may see indecisive action unfold, shaped by way of a doji indecision candle. This could draw sellers out of H1 supply at 1.2998/1.2981 today, albeit with the possibility of a fakeout to 1.30. Interestingly, H4 supply resides a touch above 1.30 at 1.3023/1.3006.
Support from 1.30 today will likely emerge off 1.2950, followed by H4 supply-turned demand at 1.2885/1.2921 and then 1.29.
Disclaimer: The information contained in this material is intended for general advice only.