Trader thoughts - the long and short of it

GBP/USD weekly

The British Pound has been trading within the confines of this multi-year ascending pitchfork formation with price posting a weekly outside-day reversal off the 2018 highs last week. The threat remains lower near-term but ultimately advance remains constructive while above 1.3675-1.3737 where the 2016 high-week reversal close (Brexit) and the 23.6% retracement of the 2017 advance converge on the lower median-line parallel (blue). Resistance remains steady at 1.4346 with a breach higher targeting 1.4571.

Bottom line: Cable may be in for a larger correction here before resuming higher. For now, look for resistance at the yearly high-close  / 200-week moving average at 1.4236 with a break lower to ultimately offer more favorable long-entries near structural support.  In the event of a topside breach, look for initial resistance targets at 1.4571.

AUD/USD weekly

Aussie has continued to hold just above a critical support barrier at 7635/37- where  the 38.2% retracement of the 2016 advance and the 61.8% retracement of the May advance converge on multi-year trendline support. Note that last week’s decline erased all of the April gains with price closing just above the monthly low-close on Friday at 7660. A break below this threshold would risk substantial losses for the pound with such a scenario targeting 7480 -7500. A breach / close above yearly-open resistance at 7801 would be needed to shift the medium-term focus back to the long-side.

Bottom line: Aussie is testing multi-year uptrend slope support with the immediate short-bias at risk while above 7636 – look for a reaction this week with the focus range to beat between 7635- 7800.