[B]Profit Target/s:[/B] 1.5700 is my ultimate target
[B]Reward-to-risk Ratio:[/B] a little over 2:1
[B]Risk percentage:[/B] 1%
[B]Indicators used: [/B]100 SMA (red)
[B]Trade Rationale:[/B] i see a potential head and shoulders pattern forming, with the neckline right at 1.5900. ahead of the NFP report, it’s dangerous leaving orders open, but i think i can use the NFP report to my advantage by using a sell stop. if it turns out largely bearish for GBPUSD, it could lead to a break of the support level at 1.5900 and the 100SMA. should that neckline give way, i don’t see why GBPUSD should stop until 1.5700. on the other hand, if the NFP report turns out to be GBPUSD bullish, my trade will not be triggered and i will not have lost anything.
[B]Trade Adjustments:[/B] stop to BE when trade is positive by 70 pips. consider trimming position if price stalls at 1.5800.
I was thinking the same thing but for different reasons.
I saw that it seems to have broken a trend line and I think it’s just retracing back up to the .5 fib. It also closed with a doji almost right on the .5 fib level.
Here are my thoughts on this pair. Below you see the 1 Week chart:
[ul]
[li]There is a nice, not too steep, upward trend line which has been broken by a strong downward trend (5 consecutive weeks of bearish candles)
[/li][li]The most recent swing low breaks below the swing lows of the previous upward trend
[/li][li]The pair reverses and shows 6 weeks of bullish candles, ending in 2 dojis
[/li][li]The dojis form at the trend line, now acting as resistance
[/li][/ul]
Based on the above I think there is a good chance that the pair will push down towards 1.55, however I think it is a bit early to say. I’d consider waiting for some bearish confirmation before taking a sell.
Furthermore you can see that a down trend has started to form, but considering the current price level there is a chance it will rally up a bit more before going down.
