GBP/USD: Technical Analysis 12 Jan 2021

Jan 12, 2021

Monthly timeframe:

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

December’s 2.5 percent push elevated GBP/USD to fresh multi-month highs and stirred trendline resistance (2.1161).

In terms of trend, however, the primary trend has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way – April high, 2018. In fact, the aforesaid high represents the next upside target on the monthly chart.

Daily timeframe:

Brought forward from previous analysis –

Resistance at 1.3755 remains a key level to be aware of on the daily chart, stationed below supply at 1.3996/1.3918. A sell-off, on the other hand, projects light on support at 1.3176.

The RSI has revealed a rangebound environment since November, limited by support around 47.00 and resistance at the 66.00 region.

H4 timeframe:

Monday’s technical research aired the following:

As you can see, demand at 1.3527/1.3556 remains in force.

Yet, through the simple lens of a technical trader, buyers appear to be losing grip. The initial reaction (black arrow) achieved modest highs at 1.3671, though subsequent reactions failed to challenge said peaks, implying sellers possibly have the upper hand here. Drifting through the aforesaid demand gestures a possible continuation to demand at 1.3401/1.3446 (aligns with a 161.8% Fib projection at 1.3441 and a 50% level at 1.3447).

As you can see, price did indeed drop through demand at 1.3527/1.3556 and came within touching distance of demand at 1.3401/1.3446, before pulling back to test the lower side of 1.3527/1.3556.

H1 timeframe:

Demand at 1.3435/1.3461 stepped forward as we transitioned into US trading on Monday, providing enough of a platform for buyers to overturn 1.35 resistance.

Overhead, 1.3550 resistance is seen, and represents a level of strength having noted the number of times the figure held as support since early January.

Observed levels:

The fact H4 retested the lower side of resistance at 1.3527/1.3556 may hinder buying above 1.35 on the H1. Though moves to 1.3550 are not out of the question as, technically speaking, this level is housed within the upper range of 1.3527/1.3556.