The range breakout and subsequent pullback to new resistance looks like a short opportunity to me… What do you think?
Well, the price has already gone way too short. It doesn’t mean it can’t go lower, but you should be careful at this point.
Well I certainly called that one wrong. It jumped back up over 60 pips.
Don’t worry, it happens. You’ll get back on track.
Obviously we know the outcome now but look at the last few candles, there’s 3 consecutive ones with long lower wicks. They should automatically make you cautious of a short from that point.
Also trades need space to move, in my opinion, ideally the break needs to be deeper so that when it does retest the support turned resistance, there’s room to trade back to the new low (which would be your first target) & then onwards from there.
You want a strong move through the support & you want it to be big & create a bit of a gap between the low & the new resistance level. It might not come back to retest but a patient trader is a successful trader.
Maybe after it finishes retracing selling will become an option again. I for one am not sure the bearish trend is over, but I do think we can expect a correction first.
End of the day the £ can only drop SO much before it simply has to come back up. I believe we’ve reached that point at the 1.41 mark. The lowest since 2010. It’s extremely oversold now and I suspect we will witness several hundred pips rally towards the 1.447 mark.
Of course I speak purely as an opinion.
Yeah Grants your view was right but try to take charts for higher duration and candles from the more history to support your view. its very common this gets falsified and market moves in other direction. So first of all makes your fundmantals clear. wait for movement in GBP at February 4th. Till them its economy will roar high. ECB adding stimulus, UK Unemployement at 10 year low.
And into technicals rather than these small breakouts, try to for some pattren or go for different kinds of moving average.
Indeed, Baz said it well about the candles. Long wicks usually mean that the price has tried to go lower but was pushed back, and then again with the next candle, and with the third; it’s just another red light to be careful if you want to go short.