GBPUSD runs into sellers around 1.2949 for the third day in a row
British Pound/US Dollar (GBPUSD) Technical Analysis Report for Dec 02, 2019 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, GBPUSD ended Monday at 1.2942 edging higher 5 pips (0.04%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GBPUSD as at Dec 02, 2019):
Monday's trading range has been 52 pips (0.4%), that's below the last trading month's daily average range of 67 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GBPUSD. Prices continued to consolidate within a tight trading range between 1.2879 and 1.2952 where it has been caught now for the last three trading days.
Three candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and one bearish pattern, the Last Engulfing Top Pattern.
After trading down to 1.2897 earlier during the day, the forex pair bounced off the key technical support level at 1.2898 (S1). The failure to close below the support might increase that levels importance as support going forward. The currency ran into sellers again today around 1.2949 for the third trading day in a row after having found sellers at 1.2945 in the prior session and at 1.2952 two days ago. The last time this happened on October 22nd, GBPUSD actually gained 0.33% on the following trading day.
While the Cable is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 1.2952 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 1.2879 where further sell stops could get activated. Trading close to October's high at 1.3013 we might see further upside momentum if potential buy stops at the level get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for GBP/USD. Out of 68 times, GBPUSD closed higher 58.82% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 57.35% with an average market move of 0.13%.
With four out of the other six Major FX Pairs closing higher today, the ones that stand out on the positive side are NZDUSD gaining 1.25% and AUDUSD closing 0.84% higher. On the flipside the worst performers have been USDCHF closing -0.88% lower and USDJPY losing -0.47%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been NZDCAD surging 1.45% and NZDHKD closing 1.24% higher. The worst performers of the day have been USDHUF tanking -1.33% and USDPLN closing -1.19% lower. Read more