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Technical Analysis – Charts of The Week

Trade Insights – GBP/USD pair has hit the Key resistance level at 138.93 and now below the Major Pivot of 138.20. Charts show Viable Short positions below the Pivot point to first retest the key support at 136.72 and if this level is broken with a strong candle, then a test of the Support Cluster at 135.75 to 136.00. Alternatively, possible long positions above 138.20 if prices recover and a strong green candle is formed above the Pivot, and prices continue to move between the parallel channel that chart analysis represents. The buyers could re-test 138.93 first and then the Resistance zone at 139.80 to 140.00.

GBP/USD

CPI and Inflation Data release and US dollar still hovering below 93.20.

  • Resistance Zone: 139.80 to 140.00
  • Key Resistance Level: 138.93
  • Major Pivot Point: 138.20
  • Key Support Level: 136.72
  • Support Zone: 135.75 to 136.00
  • Last Analysis: Blue Vertical Lines
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – GBP/USD pair has hit the Key resistance level at 138.93 and now below the Major Pivot of 138.20. Charts show Viable Short positions below the Pivot point to first retest the key support at 136.72 and if this level is broken with a strong candle, then a test of the Support Cluster at 135.75 to 136.00.

Alternatively, possible long positions above 138.20 if prices recover and a strong green candle is formed above the Pivot, and prices continue to move between the parallel channel that chart analysis represents. The buyers could re-test 138.93 first and then the Resistance zone at 139.80 to 140.00.

GBP/USD Daily Chart

Chart Analysis:

Directional bias: 2 Week GBP/USD

The Blue Vertical lines indicate our previous analysis on GBP/USD pair. This shows that the prices have been moving in a parallel sideways channel between the Support and Resistance zones as shown on the chart. The Chart analysis shows that the prices have just dropped below the 50-Day EMA and still trading above the 200-day EMA lines indicating the market is unsure at this stage what direction to take. Looking at the recent price action after our last analysis the Bulls pushed the prices higher to test the crucial level at 138.93 twice and found strong resistance where the upward move was rejected due to strong supply. It seems a parallel channel has formed, and prices are now just trading at the lower support line of the Upward moving channel. It seems for now that this support could hold but a lot of it depends on the CPI data and inflation number releases from countries like UK, Europe, and Canada.

If the Buyers could push the prices higher from here, then after moving above the Major Pivot at 138.20 the pair can test the Key Resistance zone at 138.93 which is well within the upward channel and quite doable. The real challenge is the Resistance zone on the chart and after consolidating above the Key Resistance at 138.93 the prices may find strong resistance around the zone of 139.80 to 140.00 level. This is the possible higher Take Profit limit for the Bulls. 140.00 could prove to be difficult resistance to break and the market might observe a reversal of prices from here.

However, if prices drop below the parallel channel and are pushed down hard then the first support is at 136.72 which the pair has breached only thrice since April 2021. The next Support zone is at 135.75 to 136.00.

Fundamental Overview: This week is packed with data releases and the first one is the UK monthly Inflation numbers and CPI data – Consumer Price Index an important economic indicator that gives a glimpse into current growth and inflation levels. This data is important to watch as several chatters going around winding up of Quantitative Easing. (QE) US – CPI Data was released on 14th and was an important one before the September rate decision by the Feds as the US Dollar is still hovering below 93.20 the crucial resistance zone for the US Dollar. 

UKO/USD

  • Resistance Zone: 77.60 to 78.32
  • Key Resistance: 76.00
  • Major Pivot Point: 73.33
  • Key Support: 71.80
  • Support Zone: 68.93 to 68.34
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – The UKO or Brent Crude Chart shows Viable Long positions as prices are moving higher above the Pivot of 73.33 first targeting the Key resistance at 76.00. and then the Resistance zone at 77.60 to 78.32.

Alternatively, if prices are rejected at 76.00 then possible Short Positions as the Oil prices reverse back towards the Pivot at 73.33 testing the key support at 71.80. The prices are apparently already consolidating at a crucial level of 74.90 that is also a long-term resistance zone for Oil.

UKO/USD Daily Chart

Chart Analysis: 

Directional bias: 2 Week UKO/USD

Since our last analysis on the UKO/USD, the pair dropped sharply to touch $67.67 level in July and recovered as quickly to meet resistance at $76.00. After this, there was a slower decline in the oil prices and Oil dropped to the lowest to $65.20 level by 20th August. There is a V-shaped recovery in the prices and are now growing to re-test the Key Resistance level at $76.00. The Pivot in the chart is at 73.33 also the 61.80% level of Fibonacci. If prices can manage to stay above this point this week, then we can see higher moves to first test the Key Resistance and the Resistance Zone at 77.60 to 78.32.

However, as it can be seen on the chart the prices are now already somewhat struggling just under the 74.90 level as this is also a long-term resistance level that the Oil must breach to see any higher moves. Apparently, the price could drop to retest the Support at 73.33 and then make another attempt to move above 74.90 and then test the Key Resistance level at 76.00.

For now, the prices are above the Pivot and if sellers manage to push prices lower from here then the Key Support for Oil is at 71.80 and then the crucial Support zone is at 68.93 to 68.34.

Fundamental Overview: This week has started with a positive Monday on the US and European Stock markets largely due to the upside move in the Oil prices and lack of any concrete data to move the markets. Ida hurricane in the USA has damaged some oil-producing facilities and the Oil prices are moving higher anticipating a drop in the supply. We might see prices hitting the Resistance Zone pushed by a week that is packed with data releases.

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Disclaimer

The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.

Trading in Rockfort Markets derivative products may not be suitable for everyone as derivative products may be considered as high risk. Please ensure that you understand the risks involved. A Product Disclosure Statement can be obtained here and should be considered before trading with us.

Vishal Rathod

September 16, 2021

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