(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Though under pressure, support at 1.1904/1.2235 remains in motion in May. A violation of this area, nevertheless, puts forward a 127.2% Fib ext. level at 1.1297. Neighbouring resistance, should we see an attempt at recovery, can be found in the form of a trendline (1.7191).
Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.
Daily timeframe:
Partially altered from previous analysis -
A few pips south of supply at 1.2649/1.2799 (prior demand), a double-top pattern formed at 1.2647, with last Wednesday consuming the neckline (April 21 1.2247) and establishing a potential take-profit target (purple) around 1.1855.
As of late, nevertheless, the British pound clawed back some losses vs. the greenback, derailing downside attempts. However, traders, particularly pattern traders, will be watching the neckline at 1.2247 for signs of selling. Often times you’ll see a pattern breakout followed by a retest before moving to the take-profit target.
H4 timeframe:
Sterling enjoyed considerable support since the week kicked off, drawing channel resistance (1.2642) into the frame on Tuesday, which appears to have derailed upside attempts for now. Additional supply is seen to the left of price around 1.2280 (lower arrow), though this base may simply be a reaction off the upper zone at 1.2324 (upper arrow).
A violation of the current channel resistance, therefore, shines the headlights on supply from 1.2477/1.2438, while downside could see price action attempt to fill the descending channel.
H1 timeframe:
After breaching channel resistance (1.2467), early Europe found legs Tuesday and advanced off 1.22, buoyed by additional support from the 100-period simple moving average.
Upside eventually ceded 1.2250 and reached a peak just south of 1.23, before mildly paring gains and closing sub 1.2250.
Structures of Interest:
As buyers and sellers butt heads around the daily double top neckline at 1.2247, along with H4 price closing under 1.2250 into the close and H4 rejecting channel resistance, this could put forward bearish themes today. There is, of course, one cautionary point to consider: monthly support at 1.1904/1.2235, though this area is positioned against the major trend.
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