HUCKDATE: Thoughts on GBP/USD


My trade on GBP/USD didn’t get triggered. As I promised in my trade post, I would go long if the pair closed around 1.5750. But it looks like the pair is taking it’s sweet, sweet time. It’s still lingering around the resistance level at 1.5730.

I still think that this is a valid setup. So I will be keeping a close eye on the pair. If the fundamentals and market sentiment still line up, I might just be able to take this trade this week.

It looks like GBP/USD closed above resistance around 1.5725. What do you think? Breakout or fakeout?


There is a strong turbulence between GPB / USD, probably the dollar rises (and the euro falls). Now remains to see how far…

I’m hoping to bounce back from my loss last week with this trade on GBP/USD. I spotted setups on both the daily and hourly timeframes. Are you with me on this?


I fell head over heels for this setup on GBP/USD almost as soon as I laid eyes on it. On the daily time frame, the pair has formed reversal candlesticks around its previous high, suggesting that it will soon trade lower.


I then zoomed in to the hourly time frame. To my surprise, I spotted another bearish setup that made GBP/USD look even sexier! Price is slowly creeping higher and it looks like it would soon test resistance at 1.6270. If the pair finds resistance there again, we’ll see a head and shoulders chart pattern–a formation that is widely considered bearish.

Should my trade get triggered, I’ll place my stop at 1.6325. I believe it’s a good area to consider my trade as invalidated as it’s well above last week’s high. I plan on taking profit on half of my position at 1.6170. As for the other half, I will keep it open until the downtrend lasts.

Fundamentally, it seems that we’re seeing a return to economics. Market participants are starting to realize that the all the stimulus measures that central banks from all over the world are nothing to be happy about. They were started because the economy was in the dumps, and that’s not something to be optimistic about.

The Bank of England (BOE) meeeting minutes released last week also showed that the central bank is open to further easing if the economy further deteriorates or doesn’t get better. As we have seen in the past, quantitative easing has been bearish for the pound.

Finally, I think that the rally in risky assets like the pound is severely overdone. The market will have to correct itself soon.

Here’s my game plan again:

Short GBP/USD at 1.6270, stop at 1.6325, PT1 at 1.6170, PT2 yet to be determined. Risk disclosure.

XOXO,

Huck

Its not triggered yet


I’ve taken my sweet time on the sidelines, not taking any trades on my discretionary account for the past few weeks. However, I have to admit, I fell head over heels for this simple Fibonacci setup on GBP/USD.

The pair has been slowly creeping higher for the past few trading days. I intend on getting in on the rally by jumping in on the pullback. I’m anticipating the pair to find support around the 38.2% Fib level at 1. 5940. As soon as reversal candlesticks materialize, you can be sure that I’ll be ready to pull the trigger!

Fundamentally, I think my trade also makes sense. For one, the recently released Bank of England Meeting Minutes showed that the central bank policymakers were unwilling to increase stimulus or make any rate hikes in the foreseeable future.

This is bullish for the pound as it means that many traders could start reversing their earlier short positions that bet on further easing.

No more economic releases from U.K. for the rest of the week, so market sentiment will also probably play a vital role in the pound’s price action.

To recap, here’s what I’m going to do:

Long GBP/USD at 1.5940, SL at 1.5880 (below yesterday’s low), PT 1 at 1.6010, PT 2 at 1.6140. 1% risk. Risk disclosure.

XOXO,

Huck


As you can see, a very clear bullish flag has formed on Cable’s 4-hour chart. Bullish flags are usually considered as continuation patterns. After a strong move up, price stalls and consolidates as buyers take a moment to catch their breaths before staging another bullish rally.

Given this, and the overall medium-term uptrend, I’m thinking of jumping in long once price closes above the most recent high. I’ve set a buy stop order at 1.6060 with a profit target yet to be determined. As for my stop, I’ve set a 70-pip trailing stop, which is roughly equal to Cable’s 20-day Daily Average True Range (ATR).

On the fundamental side of things, the revised GDP report for Q3 2012 will be released later. I don’t know if we’ll see any upward revision from the initial reading. However, I want to be ready should that happen.

It also seems that the U.S. fiscal cliff is once again creeping back into market headlines. I’m expecting this to weigh on the dollar in the coming trading days, potentially giving GBP/USD a boost.

To recap, here are the details of my trade:

Buy GBP/USD at 1.6060, stop at 1.5990 (trailing), profit target to be determined. 1% risk. Risk disclosure.

Wish me luck?

XOXO,

Huck

Since the Trend-Catcher has done so well on EUR/USD, I couldn’t help but wonder how it would fare on GBP/USD. This is why, from now on, I’ll include an update on the pair every week too!


It would seem that it was off to a slow start last week. Here’s a breakdown of the signals that materialized:

  1. Invalid signal since RSI wasn’t below 50.
  2. Invalid signal since RSI didn’t cross above 50.
  3. Invalid signal since RSI wasn’t below 50.
  4. Long at 1.6064. Closed due to new crossover at 1.6048. -4 pips.

Total Gain/Loss in Pips: -4 pips


I’m pretty bearish on the pound given the currency’s fundamental landscape. However, Cable has been making low after low and I can’t help but think that the pair would soon need to pullback before extending its downward move. I’ll be watching out for that and keeping close tabs around 1.5780 where the pair could test the falling trend line.

Read about my take on the fundamentals on my blog: The Loonie Adventures of a Forex Noob

Trade idea: 2013-1-30 0:30


Well, well, well, it looks like the trade setup I’ve been waiting for on GBP/USD’s 1-hour chart has finally materialized. If you recall, earlier this week, I mentioned that GBP/USD could soon stage a pullback after posting a new low below the 1.5700 handle.

With price stalling right under the 100-SMA and Stochastic showing that conditions are overbought, I’ve decided to jump in on a short. To protect myself from adverse market moves, I’ve set a stop at 1.5815, which is just a few pips above the 61.8% Fibonacci retracement level. As for my profit target, I’m initially aiming for the previous swing low, but I’ll ultimately go for new lows.

I’m not worried about the pound’s comeback yesterday. The fundamental landscape is still pretty bleak for the currency. If you’re a fan of Forex Gump like myself, you probably also know that the U.K. economy printed a much bigger contraction than what analysts anticipated and is even at risk of a triple-dip recession!

We have a few event risks for the U.S. that could move GBP/USD such as the advance GDP, FOMC, and NFP reports. I have to admit that I’m not entirely sure how they could move the dollar in the next few days. However, I’ll be sure to be on my toes for them so I can adjust my trade accordingly.

To recap:

I sold at market (1.5753), SL at 1.5815, PT1 at 1.5685, PT2 yet to be determined. Risk disclosure.

Cross-posted from my blog, The Loonie Adventures of a Forex Noob.

GBP/USD: 1-hour


I don’t know if it’s just me, but Cable looks like it has formed an inverse head and shoulders. Given the shift in the pound’s fundamental landscape and this reversal chart pattern, I’m going to look for an opportunity to go long on GBP/USD.

The neckline and the moving averages seem to coincide nicely with the Fibonacci retracement levels between 1.5720 to 1.5750. Once reversal candlesticks materialize around this area, I will be ready to pull the trigger!

I’m feeling really giddy about GBP/USD’s uptrend on the daily chart. It’s almost too good to be true! I can’t make new charts at the moment so here’s what I was looking at last week. What do you think?


GBPUSD Elliott Wave View: More Upside

GBPUSD Short Term Elliott Wave view suggests that the rally from 8/24 low is unfolding as an impulse Elliott Wave structure. Up from 8/24 low (1.2773), Minor wave 1 ended at 1.2979 and Minor wave 2 ended at 1.2851. Minor wave 3 is in progress and the subdivision is unfolding as an impulse Elliott Wave structure. Minute wave ((i)) of 3 ended at 1.2947, Minute wave ((ii)) of 3 ended at 1.2907, Minute wave ((iii)) of 3 ended at 1.3082 and Minute wave ((iv)) of 3 ended at 1.303. Minute wave ((v)) of 3 is expected to end soon within 1.3104 – 1.3182 area. Afterwards, pair should pullback in Minor wave 4 before the rally resumes. We don’t like selling the proposed pullback.

GBPUSD 1 Hour Elliott Wave Chart

GBP/USD surpassed aggressively the 1.3268 critical level and posted a 1-year high at 1.3328. My expectation is a further upside movement until the next resistance at 1.3400 psychological level. However, if the price breaks the 1.3268 barrier will move towards the 1.2995 support level, which is near with the 23.6% Fibonacci retracement level and the 50-day SMA.

The weaker than expected inflation in February had briefly caused doubts on the market about an imminent Bank of England (BoE) rate hike. But the doubts were already cast aside by improved wage data yesterday. What matters now is that the BoE will confirm market expectations today. The central bankers would have every reason to come across more optimistically. So far the economy seems robust and inflation remains above target. Only the Brexit negotiations entail the most significant risk for the future development of the British economy. After all the old EU principle still applies: nothing has been agreed until everything has been agreed. As a result markets assume that the BoE will not take too clear a stance. Yes a further rate hike in May is possible, but any more, i.e. anything to provide sustainable support for Sterling, seems unlikely in view of the continued Brexit uncertainty…

I’m bullish about the Sterling. The USD seems weak now.

The Sterling continues to appreciate, awaiting the NFP to take it further.

The US dollar advanced a bit because of the NFPs but i think it will be back to normal level soon.

I had a short and got taken out, I’ll turn bearish below 1.4220.

It was a good opportunity to short the pair this week.