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.
Good move to the downside in the past week. I expect strong support at 1.38.
Big drop this week in the pound, i believe we have reached support and next week a move up can be expected.
I closed my short position, ready to see some correction.
Yeah, I agree about that drop
GBP/USD looks like it’s ready for an upward move at current market price around 1.3460.
5 month low for the Sterling. And it seems there’s more way down.
GBPUSD is moving higher today, let’s see how the news release affects the pair.
The Sterling could be mustering power for a rally, a correction is long due.
