GBP/USD likely direction

[forexportal]

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The LONG I placed yesterday from 1.5061 now has a STOP just under yesterdays high at 1.5114 locking in 53 pips.

The 09:30 Manufacturing Production numbers surprised to the upside with a 0.7% print against expected 0.4%

This should see GBP advance until we approach the mayhem of the Non-Farm Employment Change and Unemployment numbers at 13:30 out of the USA.

On the 30m chart GBP is right up against the 200 sma and looks like its pulling back in preparation for a move higher so I may be adjusting this STOP depending on the price action.

Anything can happen at 13:30 and the general word is the numbers may exceed expectation.

There are 3 likely scenarios.

The numbers miss and USD could give back some of its recent gains against GBP and EUR in particular.

The number are more or less as expected and we’ll see a spike down in GBP and then a resumption of the move north.

The numbers exceed expectation by some margin and we see GBP head down towards 1.4815 where we should see a significant bounce.

My own guess would be scenario 2 so I expect my STOP to be hit but there may be buying opportunities post release.

[forexportal]

Moving the STOP to 1.5120 (+59) before the NFP numbers in 10 minutes

[forexportal]

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NFP numbers were slightly better than expected (241k exp 252k act and Employment Rate 5.6%) so we’ve seen USD strengthen enough to take out my STOP but progress looks to be stalling on all USD pairs.

There’s a natural entry LONG that I’ve taken at 1.5097 with a STOP under todays open at 1.5083 so as I’m in profit for the day on my last GBP LONG its worth the 14 pip risk.

The charts still look short term BULLISH for GBP (and EUR) so this trade may make progress.

We shall see.

[forexportal]

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After Sundays open I set my STOP on the LONG I placed on Friday from 1.5097 to 1.5150 which was Fridays close.

Sustained selling of GBP/USD from 07:00 has seen that STOP hit so that trade is over for a 53 pip gain.

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G/U has retraced quite a way but the 38.2 fib has remained intact and the impression is that the pullback although deep was not a reversal so we should be heading higher.

Its worth another LONG from these levels so I’ve reloaded at 1.5113 with a STOP at 1.5097 for a 16 pip risk.

The RSI on the 15m chart is moving out of oversold so in the absence of any significant news this trade may make progress but GBP is very vulnerable to any negative news so this trade is a bit speculative.

(STOP moved to 1.5093 just under 38.2 Fib and 1.5096 swing low from Friday)

[forexportal]

Price now 1.5146

STOP moved to 1.5121 just under 15m 200 sma (+9).

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STOP moved to 1.5132 just under the 200 sma on the 15m chart (+19)

[forexportal]

STOP moved to 1.5151 as we approach 22:30 (38+)

The Asian session over the small hours frequently sees GBP sell off so I’ll bank a few pips in case this happens.

GBP remains bullish over the short term and as the USD comes under pressure this trade is looking quite nice.

If I’m not STOPPED out overnight I expect this trade to head for 1.5250 area though the CPI numbers at 09:30 tomorrow will have a major influence.

[forexportal]

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Overnight GBP sold off during the Asian session as it frequently does and my STOP was hit at 1.5151 for +38 pips.

This morning the CPI numbers missed by some margin at 0.5% against 0.7% expected.

The sell off halted at 1.5077 and the subsequent price action convinced me that it was worth going LONG at this point so I entered at 1.5084 with a STOP just below the sell off low at 1.5075.

I’ve subsequently moved this stop to break even as the BEARS look like they may jump in and try and drive the price lower at any time but if they don’t then the GBP BULLS may be able to gain some ground.

The first major hurdle the BULLS will face will be as ever the 200 sma on the 1m chart.

This comes in at 1.5128 but this will sink lower and I expect 1.5120 area may be where we will see if the BULLS are in control of the trade or not.

There’s no more particularly significant news scheduled today so we can let this trade develop and I’ll move my STOP up accordingly if it does.

[forexportal]

My LONG from 1.5084 has surged past the first point of resistance (200sma on 1m TF).

I’ve moved the STOP to 1.5119 (+35) as we approach more resistance at Monthly S3 and the 100 sma on the 5m chart at 1.5144.

GBP looking very BULLISH now so although I expect a pullback at 1.5145 it should only be temporary as the BULLS prepare to head for higher ground.

[forexportal]

As GBP tackles the Weekly Pivot I’ve moved my STOP to 1.5151 which is just under the 200 sma on the 5m time frame.

So 67+ pips locked in so far.

I suspect GBP may meet quite stern resistance in the 1.5170/80 region so although I think we may be heading higher we could see quiet a deep retrace from these levels.

Having said that USD is weakening against CAD although its strengthening against the EURO so the picture is a bit mixed currently.

If 1.5181 can be taken out then GBP could be heading much higher over the next few sessions.

[forexportal]

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My STOP at 1.5151 was hit as expected for 67+ pips as the resistance at 1.5170/80 proved too much for the BULLS on this occasion but with support from Monthly S3 below it was an easy trade to go LONG from 1.5153 with a STOP below.

I’ve since moved the STOP to 1.5159 so this trade is worth 6+ pips and counting.

The Weekly Pivot will most likely prove a difficult barrier to break but with the impetus of MS3 I’m hopeful that GBP can get through here and use this key resistance as support.

Above that is yesterdays high where more BEARS will no doubt be waiting but this whole move from 1.5043 key WS1 support is looking stronger by the hour.

Plenty of hurdles ahead for G/U but quiet promising so far.

[forexportal]

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Weekly pivot has been too strong for GBP and my trade has hit my STOP for a few pips profit.

Earlier GBP bounced twice off MS1 and a LONG here again made sense.

I’m in (yet) again from 1.5152 with a STOP now at 1.5153 for a b/e trade.

I’ll leave this trade to develop but I’m expecting GBP to sell off again either at Weekly Pivot or yesterday’s high.

If however the BEARS dont jump during the Asian session and this trade survives until morning then it will be well placed to 1.5315 where there is formidable resistance which I shall discuss tomorrow.

[forexportal]

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There are “professional” traders who claim to make thousands out of trading Forex who are more than willing to sell you their trading packages yet ask them to verify their claims by subjecting their trades to MyFxBook they will refuse.

Some of these people proudly claim to use no indicators but rely exclusively on “price action” yet never look at charts less than a 4 hour time frame which is an impossibility.

Some even claim that pivot points are “useless”.

These people are charlatans.

Never buy trading advice from people who cannot prove conclusively that their methods work.

Trading without indicators is like trying to drive a car with a bag over your head. Its not impossible but you’re not going to get very far and you’re certain to crash.

In the example above which is a 30m chart of GBP/USD from the 5th of January to today, the notion that pivots are “useless” couldn’t be more wrong.

They are THE most essential trading aid for all traders but in particular for newbie, novice, inexperienced or would be traders.

I explain more about this on my (free) website but as far as I’m concerned pivots are MANDATORY if you are trying to trade Forex.

Anyway.

GBP/USD - where to today?

I’m currently LONG from 1.5166 with a STOP at 1.5140 under MS3 for a 26 pip risk.

In an ideal world I like to place one trade a day and hope that works out.

Yesterday I attempted to BUY GBP/USd on 4 occasions and although every trade did better than even money and some made over 60 pips, the big move didn’t happen.

We can see however that GBP is breaking down the resistance above it.

The Weekly Pivot has been holding things up but GBP has punched through this level and is now attempting to consolidate above it.

If this happens then GBP could head much higher.

Core Retail sales and Retail Sales out of the US at 13:30 which will impact of all dollar positions but the key event is at 14:15 when Governor Carney from the BOE stands up to speak.

Literally anything could happen to GBP as a consequence to all GBP trades open at 14:00 will need to have tight STOPS whichever direction you are it.

[forexportal]

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I’ve closed my LONG GBP/USD for 95+ pips as the initial shock of the US Retail Sales numbers is dissipating and I expect we’ll see a retrace here. The retrace may not be very far and may not happen for a while but its hard to see GBP advancing to our desired target at 1.5328 in one go so the idea is to buy back in once the retrace ends.

If 1.5268 is indeed the extent of this first big move north then a Fib suggest we may pull back to 1.5223 (76.4 Fib) or 1.5195 (61.8 Fib).

The Retail Sales numbers (Core -0.1% against exp. 0.1% and Retail -0.9% exp 0.2%) will be a big shock to USD BULLS as these numbers suggest the US recovery is not as strong as first thought).

My USD/JPY (SHORT from 119.89) is doing particularly well and USD is selling off across the board.

I may have exited my GBP/USD LONG too early but I’d rather bank my profit rather than see it eroded with a strong retrace and there will always be an opportunity to enter LONG later today.

Another factor is the 14:15 speech by Governor Stevens.

He could easily say something that would crush GBP so better safe than sorry.

[forexportal]

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Thursday 24th October 1929 is known historically as Black Thursday - the day the Dow Jones Industrial Average plunged 11% on open and precipitated the Wall Street Crash and the Great Depression.

Thursday 15th January 2015 will be known by some as Black Thursday II - the day many many traders will have had their accounts emptied in the space of minutes.

Less than 6 weeks ago the SNB loudly proclaimed that they would defend the 1.2000 EUR/CHF floor with all the measures available.

Today they reneged on that promise and scrapped that policy.

Anyone holding LONG EUR/CHF positions without a STOP in the belief that the SNB would be true to their word will have suffered catastrophic losses. Similarly anyone LONG GBP/CHF, USD/CHf and any other CHF cross pair.

The EUR/CHF which was trading at 1.2008 before the SNB announcement now sits at 1.0264 an eye watering 800 pip plunge.

Having said that there’s always the other side of the coin anyone holding CHF LONG positions are preparing to party but these people will be massively outnumbered by CHF SHORT holders.

Where does that leave GBP/USD?

Yesterday my assumption that 1.5268 was an initial top for GBP/USD following the poor U.S. Retail Sales numbers proved accurate and although the retreat from those highs was a bit messy I went LONG at 1.5236 with an open STOP.

I’d left the STOP open as I was fairly sure GBP was heading higher but I couldn’t be sure how far any subsequent retrace might go and how far the Asian traders would push the price down.

This is a risky strategy and not advised for novice traders but on this occasion my trade survived the mayhem of the SNB decision and the trade is in profit with a 31 pip STOP which I shall move as soon as possible.

The key level that GBP has taken out this week is the Weekly Pivot.

By holding above there we’re in good shape to attack WR1 at 1.5328.

13:30 will have to be watched. Poor U.S. PPI and Unemployment numbers could see this trade take off but if the numbers are good I expect the trade will be over but it should be in profit.

[forexportal]

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As the aftermath of yesterdays monumental decision from the SNB to abandon the EURO peg is absorbed, trading is getting back to normal but we’re not there yet so be prepared for rapid price movements and swings particularly on CHF pairs which should be left alone for novice traders.

Most brokers have upped the spread on all CHF pairs and the dust clearly hasn’t settled yet.

Personally I’m LONG USD/CHF from .8421 and .8769 but the fragility of these markets is well demonstrated by the 07:28 high on USD/CHF at .8806 only for this pair to be trading at .8615 just 90 minutes later and to be back pushing .88 60 minutes after that which is the best part of a 400 pip swing in 2 and half hours.

Back to GBP/USD and yesterday I went LONG at 1.5150 which was the 38.2 fib on the M15 chart. This trade made some progress but because of the nature of the market yesterday I was using very tight STOPS and I was eventually STOPPED out for 18+ pips though this trade would have been still alive had I been using a b/e STOP.

Ok so where next?

Although the key Weekly Pivot was breached yesterday this was more down to the reaction to the SNB than any technical issue.

We’re currently well above the WP and now price is advancing above all SMA’s on the H1 chart so it looks as if we’re headed higher.

I’m currently only in this market from a LONG I placed some time ago which is still under water but is improving considerably so I’m looking to add to this position.

I have a slight concern currently that we may be developing a 200 sma/ema crossover (I’ll be discussing this when I relaunch my website) so I’m looking for a pullback to 1.5195 area (61.8 Fib) before I go LONG again.

With Core CPI and CPI numbers out of the US up at 13:30 ideally I’d like to get LONG with a b/e STOP before release as I believe these numbers will miss which will hurt dollar BULLS.

I’ll update this if an entry materializes.

[forexportal]

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In my earlier post I said that there was a strong chance GBP was pulling back to lower levels and I earmarked the 61.8 M15 Fibonacci as a likely entry should it do so.

I’m now LONG from 1.5202 with a STOP at 1.5194.

If we clear the 76.4 Fib I’ll move this STOP to b/e and wait for the CPI news out of the USA at 13:30.

The CPI numbers are particularly significant as a better than expected CPI print will in theory hasten a rate rise.

Conversely if these numbers miss (which I believe they will) then this will send USD sharply lower.

[forexportal]

STOPPED at 1.5194 -8 pips

Waiting now for 13:30 and critical CPI numbers

[forexportal]

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Its clear that the markets are still hung over in the wake of the SNB decision to throw everyone to the lions the biggest casualty so far being Alpari who have gone to the wall as a consequence. They will not be the only one.

Its likely the ramifications of this move by the SNB will be felt for some time and I expect the members of the SNB will come under increasing scrutiny to justify their actions.

Earlier today the US CPI numbers missed as I had anticipated. I had not anticipated GBP to sell off as a result.

This is most contrary to expectation but it shows that the markets have yet to fully absorb the implications of the SNB move and what it means for each currency pair.

GBP/USD has put in a perfect head and shoulder patter and we are now trading back where we were Tuesday with the price nicely bouncing off Tuesday low.

Its unclear as we stand where we go next.

Staying out of this market is mandatory as thing stand as price could go anywhere from here though I expect we’ll move north.

Hopefully Monday will see a resumption of more predictable trading.

[forexportal]

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After the carnage caused by the lunatic actions of the SNB last week its a safe bet that this week will not be as dramatic.

As the dust settles all CHF pairs are trading well outside their daily range and spreads have widened considerably making these pairs a no go area for inexperienced traders.

I’m currently LONG USD/CHF and GBP/CHF and expect both trades to progress as I’m looking for USD/CHF in particular to recapture the .9000 handle but it may be a rocky ride.

GBP/USD looks as if it is resuming from where it left off at the start of last week.

Fridays low was a double bottom and following the nice head and shoulders pattern that formed last week I’m expecting G/U to head north and target the Weekly Pivot initially and then WR1 over the next few trading sessions.

I’m already in this market from 1.5092 but I’m looking to add to the position once the price takes out the Weekly Pivot and holds above it.

No anticipated news today and as its Martin Luther King Day in the US its a Bank Holiday so we may see thin volumes and potentially choppy action although its more likely to be a slow day with shorter than usual daily ranges.