Bitcoin analysis for December 26, 2017

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Bitcoin (BTC) has been trading upwarrds. As I expected, the price tested the level of $15.320. The latest story (again) on mainstream media meant to scare away uninformed people from using bitcoin is about the possibility of China taking over the cryptocurrency. This particular FUD (fear, uncertainty and doubt) meme was also publicized widely in 2015 and 2016. Technical picture looks neutral.

Trading recommendations:

According to the 1HM time - frame, I found rejection from the level $11.600 but the price is right now on the Fibonacci retracement 50% ($15.060), which is sign that buying looks risky. I also found a support cluster, which is now acting like resistance. My advice is to watch for potential selling opportunities. The successful rejection from Fibonacci level may confirm further downward continuation.

Support/Resistance

$15.320 – Intraday resistance (price action)

$15.061 – Fibonacci 50 % resistance

$16.030 – Fibonacci 61.8 % resistance

$13.750 – Objective target

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GBP/USD analysis for December 26, 2017

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Recently, the GBP/USD has been trading sideways at the price of 1.3360. According to the 4H time - frame, I found that price is trading inside of descending triangle, which is a sign that buying looks risky. I also found a broken upward trendline, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.3300 (key support) and at the price of 1.3075. The breakout of the level 1.3300, will confirm testing of the second target at the price of 1.3075.

Resistance levels:

R1: 1.3390

R2: 1.3420

R3: 1.3440

Support levels:

S1: 1.3340

S2: 1.3320

S3: 1.3290

Trading recommendations for today: watch for potential selling opportunities.

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Trading Plan for EUR/USD and US Dollar Index for December 26, 2017

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Technical outlook:

The EURUSD chart is telling the same story as we have been discussing since last few trading sessions. All through the remaining trading sessions for December 2017, the pair might trade sideways within the above channel formed with lack of participation, but once volumes return one should expect a break below channel support and witness a drop towards 1.1550 at least. The wave structure also remains unchanged with the 3rd of (3)rd wave expected to resume lower. Please note that line in sand remains at 1.1960 levels and prices should not exceed that if the bears are to stay in control. The pair has also tested Fibonacci 0.786 resistance levels around 1.1900 last week and it could retest before finally giving in to bears again. We suggest that you exercise more patience through the next few days and keep the bigger picture in mind.

Trading plan:

Please remain short for now, stop above 1.1960, target below 1.1550 levels.

US Dollar Index chart setups:

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Technical outlook:

The US Dollar Index is looking to break above its immediate line of resistance as highlighted here. A push above 93.50 levels would confirm that prices are again into the buy zone and also the corrective phase is over with a meaningful low in place through 93.15 levels. The overall wave structure also remain intact with the 3rd of (3)rd wave expected to resume any moment, maybe due to lack of volumes for the next few days it might delay the process. For this structure to remain intact, prices need to stay above 92.50 levels going forward and if it does, we should be seeing 95.00 and 98.00 levels very soon. Please note that on the bigger picture, at least an (A)-(B)-(C) corrective rally is unfolding for now, with wave (C) into progression.

Trading plan:

Please remain long for now, stop below 92.50, target 95.00 and higher.

Fundamental outlook:

No major events are lined up for the day.

Good luck!

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EUR/USD analysis for December 26, 2017

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Recently, the EUR/USD has been trading sideways at the price of 1.1852. According to the 30M time - frame, I found that price has broken the upward trendline in the background, which is a sign that buying looks risky. I also found a bearish flag pattern in creation, which is another sign of weakness. My advice is to watch for potential selling opportunities. I have placed Fibonacci expansion to find potential downward targets. I got FE 61.% at the price of 1.1824, FE 100% at the price of 1.1793 and FE 161.8% at the price of 1.1740.

Resistance levels:

R1: 1.1884

R2: 1.1905

R3: 1.1945

Support levels:

S1: 1.1825

S2: 1.1790

S3: 1.1765

Trading recommendations for today: watch for potential selling opportunities.

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The yen created a Forex puzzle

Japan is called the Land of the Rising Sun for a reason. Not only does she get up early, but she also leaves Christmas sooner. Such a busy G10, which allows the consideration of yen as the most interesting currency of the week. It is true that one should make a reservation with internal macroeconomic statistics.

"Japanese" has been living a strange life for more than a year as it sharply reacts to the dynamics of the rates of the US debt market. This is promoted by the policy of targeting the yield curve, which became part of the practice of BoJ in late 2016. At the same time, the gradual increase in the core inflation and the positive GDP are interpreted in the context of maintaining confidence in the current leadership of the Central Bank. In February, the term of office of Haruhiko Kuroda expires and Reuters citing from an official source in the government claims that it will be prolonged. Indeed, what is the use of changing horses in midstream?

USD / JPY pair dynamics and US Treasury yields

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Source: Trading Economics.

The US Congress is the "bearish" factors for US bonds. Their sales lead to an increase in yield, which supports the "bulls" for USD / JPY pair. At the same time, North Korea's high-sounding statement that the next UN economic sanction is tantamount to declaring war, which increases the demand for safe-haven assets. In my opinion, Pyongyang is unlikely to decide on new missile tests, because this will entail even greater restrictions on energy supplies to the disgraced country. Rapid de-escalation of the conflict will allow rates on American debts to continue the rally, which will put pressure on the yen.

Despite the fact that the "Japanese" is likely to continue to be under pressure in the short term, investments in the medium- and long-term horizon, it seems to be in good position. In fact, that investors are already beginning to speculate, will BoJ normalize monetary policy in 2018? Will the BoJ follow the path of the ECB, the Bank of Canada and the Bank of England? On the contrary, will they openly declare that their roads are diverged on the example of the RBA? De jure nothing is clear, and the de facto curtailment of QE is already in full swing. Instead of the planned £ 80 trillion increase in the monetary base, assets were purchased at just more than £ 60 trillion that puts next year's figure to £ 44 trillion.

Haruhiko Kuroda has twice about the dangers of negative rates for the banking system, and his words. At the same time, no one will believe in the official normalization of BoJ's monetary policy.

Technically, the "bulls" of USD / JPY pair are managed to gain a foothold above the important support at 113. In case of a successful update in the December maximum, the pattern AB = CD with a target at 114.75 will be triggered.

USD / JPY pair daily chart

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Elliott wave analysis of EUR/NZD for December 26, 2017

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Wave summary:

Wave ii likely completed with the test of 1.6828 and we are now looking for a break above minor resistance at 1.6927 confirming wave iii higher towards at least 1.7368 is developing on the way higher to the long-term at 1.7777.

R3: 1.7064

R2: 1.6993

R1: 1.6927

Pivot: 1.6855

S1: 1.6828

S2: 1.6802

S3: 1.6780

Trading recommendation:

We are long EUR from 1.6873 With stop placed at 1.6795.

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Elliott wave analysis of EUR/JPY for December 26, 2017

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Wave summary:

With the break above 134.50 the "old" (D)-wave target at 137.37 has been revived. Short-term EUR/JPY will remain positive as long as it stays above minor support at 133.62 for more upside pressure towards 135.75 and 136.05 on the way higher to the 137.37 target. Only a direct break below short-term important support at 133.62 will indicate a false break above 134.50 and a decline to 131.14.

R3: 136.05

R2: 135.75

R1: 134.90

Pivot: 134.40

S1: 133.84

S2: 133.62

S3: 133.24

Trading recommendation:

We are long EUR from 134.10 with stop + revers placed at 133.55.

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Intraday technical levels and trading recommendations for EUR/USD for December 26, 2017

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2050-1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair has been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450.

The current bullish breakout above 1.1450 allowed a quick bullish advance towards 1.2100 where recent evidence of bearish rejection was expressed (Note the previous Monthly candlestick of September).

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Daily Outlook

In January 2017, the previous downtrend was reversed when the Inverted Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further bullish advance towards 1.1415-1.1520 (Previous Daily Supply-Zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, the evident bullish breakout was expressed towards the price level of 1.2100 where the depicted Head and Shoulders reversal pattern was expressed.

If the recent bearish breakout persists below 1.1700 (Neckline of the reversal pattern), a quick bearish decline should be expected towards the price zone of 1.1415-1.1520 (Initial targets for the depicted H&S pattern).

The bearish target for the depicted Head and Shoulders pattern extends towards 1.1350. However, to pursue towards the mentioned target level, a significant bearish pressure is needed to be applied to the mentioned zone (1.1415-1.1520).

However, In November, recent price action around the price zone of 1.1520-1.1415 indicated evident bullish recovery. This hindered further bearish decline which allowed the current bullish pullback to occur towards the price level of 1.1900.

Trade Recommendations

The price levels around 1.1900-1.1950 were suggested for a valid short-term SELL entry. It's already running in profits.

S/L should be lowered to 1.1900 to offset the associated risk. Remaining T/P levels to be located at 1.1700 and 1.1590.

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NZD/USD Intraday technical levels and trading recommendations for December 26, 2017

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Daily Outlook

Bullish breakout above the downtrend line took place on May 22. Since then, the market has been bullish as depicted on the chart.

This resulted in a quick bullish advance towards next price zones around 0.7150-0.7230 (Key-Zone) and 0.7310-0.7380 which was temporarily breached to the upside.

Recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand-zone) which failed to offer enough bullish support for the NZD/USD pair.

Re-consolidation below the price level of 0.7300 enhanced the bearish side of the market. This brought the NZD/USD pair again towards 0.7230-0.7150 (Key-Zone) which failed to pause the ongoing bearish momentum.

An atypical Head and Shoulders pattern was expressed on the depicted chart which initiated bearish reversal.

As expected, the price level of 0.7050 failed to offer enough bullish support for the NZD/USD pair. That's why, further bearish decline was expected towards 0.6800 (Reversal pattern bearish target).

Evident signs of bullish recovery was expressed around the recent low (0.6780). That's why, a bullish pullback is expected towards 0.7050.

Moreover, further bullish advance should be expected towards 0.7150 if enough bullish momentum is expressed above the price level of 0.7050.

Trade Recommendations:

An inverted Head and Shoulders pattern was established on the chart indicating high probability of bullish reversal.

That's why, the price zone of 0.6800-0.6830 was considered for a short-term BUY entry. Bullish persistence above 0.6950 (neckline) is mandatory to pursue towards next bullish targets.

S/L should be moved to 0.6900 to secure some profits. T/P level remains projected towards 0.7050 and 0.7150.

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Fundamental Analysis of GBP/USD for December 26, 2017

GBP/USD has been extremely volatile and corrective recently above the 1.3300 support area. GBP is currently struggling to gain over USD despite the recent market sentiment which is not in favor of USD to gain some momentum. Currently, the pair is expected to make some corrective moves on the thin market as the holidays are being observed all over the world. So, most of traders are out of the market, taking a break. Despite the holiday, there are certain economic reports which are going to be published this week which might help to establish a clear trend in the coming days. Today, US S&P/CS Composite-20 HPI report is going to be published which is expected to have a slight increase to 6.3% from the previous value of 6.2% and Richmond Manufacturing Index is expected to decrease to 22 from the previous figure of 30. Moreover, this week US CB Consumer Confidence report and Unemployment Claims report are going to be published which might play a vital role to establish good momentum for USD against GBP. On the other hand, today there are no economic reports or events meaningful for GBP amid the observance of Boxing day. However, tomorrow UK High Street Lending report is going to be published which is expected to show a slight increase to 40.6k from the previous figure of 40.5k. Though the economic report is expected to have minimum impact on GBP, a better-than-expected result might help to cap USD gains. As for the current scenario, USD is expected to gain momentum with more high impact economic reports this week. So, positive results will lead to much impulsive bearish pressure in the pair.

Now let us look at the technical chart. The price is currently being squeezed with bearish pressure forming a Triangle pattern which is also recognized as a Pre-breakout Structure as well. As for the current price movement, the price is expected to break below 1.33 in the coming days. If the price breaks and closes below 1.33 with a daily close, then we will consider sell positions with a target towards 1.3030-50 support area. As the price remains below 1.3450, the bearish bias is expected to continue further.

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Fundamental Analysis of EUR/USD for December 26, 2017

EUR/USD has been quite bullish recently that pushed the price higher to the resistance area between 1.1850 and 1.1930. Amid the thin market during the holidays this week, the pair is likely to continue correction moves without any trend defining momentum. Nevertheless, USD is expected to have stronger momentum over EUR as some market-moving economic reports are going to be published this week. Today, USD S&P/CS Composite-20 HPI report is due which is expected to have a slight increase to 6.3% from the previous value of 6.2% and Richmond Manufacturing Index is expected to decrease to 22 from the previous figure of 30. Moreover, in the coming days of the week, US CB Consumer Confidence report and Unemployment Claims report are going to be published which are also forecasted to bring mixed readings. On the EUR side, today we do not have any economic reports or events to have an impact of EUR's gains. However, on Thursday this week the ECB Economic Bulletin is going to be released. Besides, on Friday German Prelim CPI, Spanish Flash CPI, and M3 Money Supply reports are going to be published where most of the forecasts are negative for the currency. As for the current scenario, the US is expected to present some positive economic reports which could provide the US currency with support. So USD could gain momentum over EUR in the coming days. Though the market is expected to be quite corrective in the coming days, any impulsive bearish pressure will lead to the overall bearish pressure in the short term.

Now let us look at the technical chart. The price is currently holding inside the resistance area between 1.1850 and 1.1930. Besides,the dynamic level of 20 EMA is acting as support. The market is currently expected to be quite corrective and less liquid amid the holidays. However, a break above 1.1930 with a daily close will lead to further bullish pressure with a target towards 1.2050. Though the price has the bullish pre-breakout structure, it also suggests the probability of bearish pressure as well. In this case, if the price breaks below 1.1850 with a daily close, then we will be looking forward for a bearish move in the coming days with a target towards 1.1660 support area in the coming days.

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Fundamental Analysis of USD/JPY for December 26, 2017

USD/JPY has recently rejected off the 113.60 resistance area in a bullish volatile trend. USD has been dominating the JPY for a few months now whereas currently, JPY is showing some momentum to get over it. Today, JPY Household Spending report was published with an increase to 1.7% from the previous value of 0.0% which was expected to be at 0.6%, National Core CPI report showed increase to 0.9% which was expected to be unchanged at 0.8%, Tokyo Core CPI increased to 0.8% from the previous value of 0.6% which was expected to be at 0.7%, SPPI was published unchanged as expected at 0.8% and Unemployment Rate has decreased to 2.7% which was also expected to be unchanged at 2.8%. The positive economic report results helped JPY to gain some momentum currency but any positive economic report from USD side may put the market into correction again. On the USD side, USD S&P/CS Composite-20 HPI report is going to be published which is expected to have a slight increase to 6.3% from the previous value of 6.2% and Richmond Manufacturing Index is expected to decrease to 22 from the previous figure of 30. Additionally, this week USD CB Consumer Confidence report and Unemployment Claims report is going to be published which is also forecasted to be quite mixed with the outcome. To sum up, JPY is currently quite positive with the bearish momentum backed by positive economic reports today which is expected to help the currency to gain good momentum over USD in the coming days.

Now let us look at the technical view, the price is currently residing above the support area of 113.10 where a daily close below this area will lead to impulsive bearish pressure in the coming days with the target towards 112.00 support area. As the price remains below 113.60 resistance area the bearish bias is expected to continue further.

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Daily analysis of major pairs for December 26, 2017

EUR/USD: The market has opened with a small gap-up, and that could mean a continuation of the bullish movement, whether the small gap-up is filled or not. Price could gain about 100 pips before the end of the week, and the movement is not expected to be huge. Next month – January – would be marked with strong volatility.

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USD/CHF: The USD/CHF pair is yet to make any meaningful movement this week. The market is not expected to make any significant movement this week (because volatility would thin out). Price is thus expected to oscillate between the resistance levels at 0.9950 and support level at 0.9800 within the next several trading days. However, a breakout will occur early January.

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GBP/USD: The GBP/USD pair did not make any significant movement last week, neither is it expected to make any significant movement this week (because volatility would thin out). Price is thus expected to oscillate between the accumulation territory at 1.3250 and the distribution territory at 1.3500 within the next several trading days. However, a breakout will occur early January.

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USD/JPY: This trading instrument also is yet to make any significant movements this week. The pair gained 150 pips last week, testing the supply zone at 113.50, and then closing below it on Friday. The bullishness in the market could be sustained until the end of this year (although it is unlikely that a strong movement would be witnessed).

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EUR/JPY: There is a Bullish Confirmation Pattern in the EUR/JPY market; plus it has opened with a small gap-up this week (which respects the existing bias). Price is expected to go northwards this week, gaining a maximum of 200 pips before the week runs out. So, the supply zones at 135.00, 136.00 and 136.50 could be reached.

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Technical analysis of USD/CHF for December 26, 2017

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Overview:

  • Pivot: 0.9921.
  • The USD/CHF pair is stil continuing an uptrend since from the spot of 0.9850 and 0.9880. The bias remains bullish in the nearest term testing 1.0037 or higher.
  • The price is still trading around the spot of 0.6948 and 0.7026. The USD/CHF pair will continue to rise from the level of 0.6948. The support is found at the level of 0.6948, which represents the 61.8% Fibonacci retracement level in the H4 time frame.
  • The price is likely to form a double bottom. Today, the major support is seen at 0.6948, while immediate resistance is seen at 0.7026.
  • Accordingly, the USD/CHF pair is showing signs of strength following a breakout of a high at 0.6948. So, buy above the level of 0.6948 with the first target at 0.7026 in order to test the daily resistance 1.
  • Also, the level of 0.7026 is a good place to take profit because it will form a double top. Amid the previous events, the pair is still in an uptrend; for that we expect the USD/CHF pair to climb from 0.7026 to 0.7065 today.
  • However, in case a reversal takes place and the USD/CHF pair breaks through the support level of 0.6948, a further decline to 0.6820 can occur, which would indicate a bearish market.
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Technical analysis of NZD/USD for December 26, 2017

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Overview:

  • On the one-hour chart, the NZD/USD pair bullish trend from the support levels of 0.6950 and 0.6985. Currently, the price is in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. As the price is still above the moving average (100), immediate support is seen at 0.6950 (major support), which coincides with a golden ratio (61.8% of Fibonacci). Consequently, the first support is set at the level of 0.6985. So, the market is likely to show signs of a bullish trend around the spot of 0.6985. In other words, buy orders are recommended above the first support (0.6985) with the first target at the level of 0.7065. Furthermore, if the trend is able to breakout through the first resistance level of 0.7065. We should see the pair climbing towards the bext target (0.7090) to test it. It would also be wise to consider where to place a stop loss; this should be set below the second support of 0.6950.
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NZDUSD right below resistance, prepare to sell!

The price is starting to test major resistance at 0.7055 (Fibonacci retracement, horizontal overlap resistance) and we expect a strong reaction off this level to push the price down to at least 0.6822 support (Fibonacci extension, horizontal swing low support).

Stochastic (34,3,1) is seeing major resistance below 97% and we expect a strong drop from here.

Sell below 0.7055. Stop loss is at 0.7181. Take profit is at 0.6822.

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AUDUSD approaching major resistance, prepare to sell!

The price is approaching major resistance at 0.7739 (Fibonacci retracement, horizontal pullback resistance) and we expect a strong reaction off this level to push the price down to at least 0.7580 support (Fibonacci retracement, horizontal breakout support level).

Stochastic (34,3,1) is seeing major resistance below 98% and we expect a strong reaction off this level.

Sell below 0.7739. Stop loss is at 0.7821. Take profit is at 0.7580.

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Daily analysis of USDX for December 26, 2017

There is a bearish consolidation underway in the US Dollar Index, which is currently finding dynamic resistance in the 200 SMA at the H1 chart. The index also remains supported by the 93.30 level, which is helping to cap further bearish advance and it should provide a strong support in order to rally towards the 94.09 level.

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H1 chart's resistance levels: 94.09 / 94.85

H1 chart's support levels: 93.30 / 92.83

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 93.30, take profit is at 92.83 and stop loss is at 93.76.

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Daily analysis of GBP/USD for December 26, 2017

GBP/USD still comatose around the 200 SMA and awaits for a catalyst that decides the next path in the short-term. That moving average could act as a dynamic resistance for the pair and it could help to push lower in order to strengthen the bearish path. The critical level to the downside remains at 1.3303, ahead of 1.3234.

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H1 chart's resistance levels: 1.3444 / 1.3516

H1 chart's support levels: 1.3303 / 1.3234

Trading recommendations for today: Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.3444, take profit is at 1.3516 and stop loss is at 1.3372.

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