GBP/USD Technical Analysis Report 11 Jan 2021

Jan 11, 2021

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves) December ending higher by 2.5 percent elevated GBP/USD to fresh multi-month highs and stirred trendline resistance (2.1161) into the year end.

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 this week, 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:

Brought forward from previous analysis –

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).

H1 timeframe:

Brought forward from previous analysis –

1.3550 support has proven an effective base, though like the H4 demand underlined above at 1.3527/1.3556, appears to be hanging by a thread. This is particularly evident having seen buyers failed to topple 1.36 resistance and neighbouring 100-period simple moving average on numerous occasions. Jabbing through 1.3550 this week unlocks 1.35 support, encased within demand at 1.3490/1.3509.

Observed levels:

Long term:

The break of long-term trendline resistance on the monthly timeframe has likely caught the eye of long-term buyers. From the daily chart, upside hurdles stand out at 1.3755 resistance and supply from 1.3996/1.3918.

Short term:

Shorter-term technical levels hint at possible weakness, with moves below 1.3550 support a likelihood on the H1 this week. By extension, this could see a breach of H4 demand at 1.3527/1.3556 and at least a follow-through move to 1.35 support on the H1.