GBP/USD: Technical Analysis Report 15 Jan 2021

Jan 15, 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). January, as you can see, modestly extended gains and currently trades off session lows.

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:

Partly modified from previous analysis –

Renewing 2021 highs, GBP/USD is on the verge of joining hands with resistance at 1.3755, with a breach uncovering supply at 1.3996/1.3918.

Should sellers regain consciousness, Monday’s swing low at 1.3450 could be challenged.

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

H4 timeframe:

Resistance at 1.3711, and associated Fib ext. levels, are under fire as we write. Splitting the aforesaid level shines light on resistance from 1.3763, set just a few pips north of daily resistance at 1.3755.

Demand at 1.3576/1.3607 is plotted below, with a break uncovering additional demand at 1.3401/1.3446 (and associated Fibs).

H1 timeframe:

The technical scene on the H1 chart has buyers and sellers going toe-to-toe around the lower side of 1.37.

Although sellers defended 1.37 in the past, the recent downside move from the round number failed to reach the demand area listed on the H4 timeframe at 1.3576/1.3607, which suggests bid-side strength.

Skies above 1.37 appear reasonably clear until the 1.3750 resistance, arranged just under daily resistance at 1.3755.

Observed levels:

Scope to travel north on the monthly timeframe and also on the daily timeframe (at least until resistance at 1.3755), on top of the lack of selling interest from the 1.37 region on the lower timeframes, implies a break of 1.37 is in the offing, with 1.3750 resistance targeted (plotted on H1 chart).