[B]Long or Short:[/B] Short
[B]Entry Point:[/B] Short at 126.00 [B]
Stop loss:[/B] 132.00 (above 61.8% Fibonacci and 100 and 200 SMA)
[B]Profit target:[/B] 117.50 (previous low)
[B]Risk Percentage:[/B] 1.0%
[B]Reward-to-risk Ratio:[/B] 1.42:1
[B]Tools used:[/B] 100 SMA (BLUE), 200 SMA (RED), Fibonacci
[B]Trade Rationale:[/B]
Even though the U.K. had pretty bad economic reports, the pound has remained resilient thanks to good news from the euro zone. But I think that after a while the good vibes will wear off and traders will once again pay attention to the quantitative easing and threats of recession in the U.K.
On the technical side I’m expecting the pair to rise a bit more up to the major resistance-turned-support at 126.00 on the daily chart before it starts to pare back its gains. I placed my entry at the important 126.00 level with my stop loss safely above the 100 and 200 SMA and 61.8% Fibonacci.
[B]Trade Adjustment:[/B]
I’ll be looking for potential intraday trades on the shorter time frames if I don’t triggered. But if price goes my way I plan on moving my stop loss to break even when it reaches 124.00 My first profit target is at 117.50, but I can also trail the trade if the downward move is strong.