Look beyond ordinary analysis
GBPUSD has been showing some signs of strength despite the Brexit and the latest Yellen’s comments. It has been trading in the tight range and it didn’t form a strong downtrend as EURUSD has. This tells me that there could be some more buyers than we think.
According to COT analysis:
Speculators are now holding 130K short contracts. The highest number ever.
As the market is expecting another leg down for the British currency, the Open Interest and the largest number of shorts suggest that the bottom is near despite the expected lower interest rates. The post Brexit sell off might include all bears and there are not many of them left to sell GBP. This could be a catalyst for higher prices.
Over the last week or so, GBPUSD reached 1.3070, which is an exact 50% Fib retrecement of the most recent up move printed in August.
At the moment the pair broke out from a tight range (1.3070 – 1.1320) and it is trading above 1.3140.
I expect the price to continue higher towards 1.3170
I will be looking to enter long position on the pullback towards the support – former resistance of the range. The long limit order can be 1.3120 with the stop below the lower band of the range @ 1.3060
As this is a trade against the main downtrend with the R:R 1, I will enter half position.
Price: 1.3110 or better
Trade: Buy Limit
Stop Loss in Pips: 50
Take profit in pips: 80
Risk of Equity: 1%
ARE THERE MAJOR RISK EVENTS TODAY/THIS WEEK: Yes
Is the market risk off or on? SP500, DAX, NIKKEI. Are the down or up: Not clear to me
Is this trade with the trend?: Reversal
Did I see it yesterday?: No
Is this a pullback measured by Fibs?: Yes
Am I buying support?: Yes
Am I selling resistance?: N/A
Is this entered during London’s session?: Not sure. Its a pending order
Did the price pulled back from 200MA on 15Min?: Yes
Are stochs extreme on multi charts?: Yes
Where is the price in terms of Pivots Points?: Resistance
Cable, after tumbling on the back of ADP numbers, recovered and is trading above 1.3140 . I got filled at 1.3090. Moving the stop to Break even now
GBPUSD advanced sharply in Today’s session. Profit target was filled
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