GBPUSD – Consolidation In Place, But Bullish Pressure Weakening
For the last 8 days, the sterling has been consolidating between the 1.7075 and 1.7175 levels we’ve been mentioning in prior commentaries. You will notice in this consolidation the greater presence of wicks to the downside, communicating the bulls were buying the pair on dips intra-day.
However, the last few days have shown an inability to reach the higher levels of the consolidation, while holding more towards the lows. This could be hinting the bulls are becoming less able to keep up the bullish pressure to support the pair.
For now, watch this range for the next directional clues. Overall the bull trend is still intact so we will prefer to trade with the trend. A break below 1.7075 puts 1.7050 and 1.6975 up next while a break above 1.7175 will put 1.7245 under pressure.
GBPJPY – Low Quality 3P Setup. Attempting to Base (4hr Chart)
For the last 10+ days, the GBPJPY has been losing ground, now completing its fourth consecutive down-leg. The last one is a little more interesting as it a) had the strongest bounce after a sharp sell-off, and b) formed a low quality 3P HLR setup.
This is a more earnest attempt to base, but being a lower quality 3P, the chances of it bouncing are less than if it were a medium or high quality 3P.
We now have our ‘recovery‘ point in 173.75 which the bulls will need to clear before bringing in new buyers. As long as this level holds the upside, then bearish pressure will resume, perhaps a correction near the lows here. For bears, if 173 is breached, then 172.45 will be the next target.
NZDUSD – Correcting, Possibly Rolling Over
Back on our weekly commentary from the beginning of this month, we talked about the key resistance level for the Kiwi at 8842, and that bulls were likely to take profit ahead of this level. We suggested selling just below this level as our trade idea.
Last week the pair hit a high just 7 pips below this level, and has since sold off, rejecting this level twice now, offering a really good risk to reward play so congrats to the members who profited from this trade idea.
The series of lower highs and double rejection suggests the kiwi is minimally correcting (between 8790 – 8842), but possibly rolling over. It is likely some bulls will step in around 8790, but if this level fails, then a deeper pullback towards 8745 and 8700 is on the cards. If the 8790 level holds, and finds some impulsive buying off the level, then a retest of the 8835/42 should be on deck. So plays on both sides here.
Gold – Correcting Near Swing Highs (4hr Chart)
After breaking out of the key 1330 level that we talked about in our daily market commentary ahead of time, gold has been in a corrective move since then, and appears to be stabilizing above the prior resistance level. In fact, it seems to be holding just above 1333 before finding some buyers to close the week who are not worried about weekend risk (bullish sign).
As long as we hold above 1300, our view will be bullish, so we’ll look to get long on pullbacks. My pullback levels to look for longs are between 1333 and 1324. If it breaks above the 1345 highs of last week, then 1351 and 1386 will be up next. If it breaks below the consolidation, then 1306 will be the next level bulls get in.
