Notes on the London Overnight Breakout Strategy for Monday morning
I donât like the look of this chart. Thereâs too much distance between the current price and the Period HIGH for me to believe in a breakout to the upside. As for the downside, Iâm just leery of a Short Entry 18 pips above the 1.6200 level.
There may be a good trade in there somewhere, but itâs NOT the breakout trade we have been working so hard to perfect.
I will stand aside this morning.
For those who want to trade this set-up, here are the pertinent facts and figures:
Resistance and Support levels for Monday morning:
R â 1.6381 â August 28 high â VERY STRONG
R â 1.6364 â August 28, 11:30 GMT candle high
R â 1.6344 â August 28, 16:00 GMT candle high
R â 1.6314 â August 28, candle high on multiple candles
S â 1.6200 â century mark
S â 1.6186 â August 26 and 27, candle low on multiple candles
S â 1.6168 â August 27, 11:15 GMT candle low
S â 1.6152 â August 27 low â VERY STRONG
Scheduled News Releases:
As Mike pointed out, Monday is a British bank holiday, and this will definitely affect the nature of the market throughout the day. Here is what Forex Factory says about it:
Description: UK banks will be closed in observance of the Summer Bank Holiday;
Usual Effect: Low liquidity and irregular volatility;
FF Notes: Most Forex brokers remain open for every holiday except Christmas and New Yearâs Day. Stock markets and banks have slightly different holiday schedules;
Why Traders Care: Banks facilitate the majority of foreign exchange volume. When they are closed the market is less liquid and speculators become a more dominant market influence. This can lead to both abnormally low and abnormally high volatility;
There are no news releases, scheduled for Monday morning, which are considered high-impact or medium impact for the GBP or the USD.
Later in the week, the schedule will get busy, including U.S. FOMC Minutes on Wednesday, the first day of G20 Meetings on Friday, and the U.S. Non-Farm Payroll Report on Friday. More on these as the week unfolds.
Here is the calendar of high- and medium-impact news releases for the week:
The Period HIGH is 1.6300 (bid). The Period LOW is 1.6224 (bid). The range is 76 pips.
Entry Orders:
None for me this morning.
Good luck, guys.
Clint