the 1.27 neighborhood looks prime for shorts...
Sterling closed marginally higher against its US rival on Wednesday, consequently printing a near-full-bodied daily bull candle and clocking a high of 1.2638 on the day. With the psychological resistance 1.26 out of the picture, the H4 candles, as you can see, marched north to test a minor H4 resistance coming in at 1.2635. While this level is currently capping upside, the more favorable area is seen a little higher up on the curve around the 1.27 neighborhood. There are a number of technical aspects that support this view. Firstly, 1.27 boasts a H4 Quasimodo resistance level at 1.2699. Secondly, it’s also positioned within daily supply registered at 1.2728-1.2657, and finally traders may also want to note that the H4 base is located only 27 pips from a weekly Quasimodo resistance level planted at 1.2673.
Our suggestions: Based on our analysis above, we’re ultimately suggesting to wait for a H4 candle close above the current H4 resistance line today. Should this come to fruition, the 1.27 level will likely be the next base on the hit list, which, given the confluence stated above, is also a beautiful zone to short from. If, like us, you’re planning to sell from here, we’d advise placing stop-loss orders above the apex high of the H4 Quasimodo formation (1.2728), as this will also clear the upper edge of the daily supply zone.
Data points to consider: UK Preliminary GDP (4th quarter) release at 9.30am. US Jobless claims at 1.30pm GMT.
Our suggestions: Based on our analysis above, we’re ultimately suggesting to wait for a H4 candle close above the current H4 resistance line today. Should this come to fruition, the 1.27 level will likely be the next base on the hit list, which, given the confluence stated above, is also a beautiful zone to short from. If, like us, you’re planning to sell from here, we’d advise placing stop-loss orders above the apex high of the H4 Quasimodo formation (1.2728), as this will also clear the upper edge of the daily supply zone.
Data points to consider: UK Preliminary GDP (4th quarter) release at 9.30am. US Jobless claims at 1.30pm GMT.
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