Post news reaction has faded and gbp/usd is
retracing after briefly going over 1.5700 level. You may actually see a
reversal pattern on 15 minute chart. It is often called an M pattern, which
indicates that the move up is stalling and a reversal is taking place. It is
most effective if the second top does not reach previous one and the pattern
itself does not last longer than 2 hours. In this case it was around 2 hours.
The selling signal occurred when 12:30 GMT (15
minute) candle closed. You would have opened a short around 1.5689 level
(depending on your broker spreads) with a stop loss order at 1.5720. It might
be a little bit too big for a day trade, but remember that you can always move
your stop when the trade starts working in your favor.
Take profit could be around 1.5660-1.5650 (50 percent retracement from the peak). Price
is slowly approaching the level. At this point one can actually move stop at break even.
After today’s move we can state that bullish bias
has gotten stronger and Pound may finally overcome 1.5700 level tomorrow or by
the end of the week. I am waiting for the pair to dip to buy it.
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