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MadMarketScientist

GBPUSD Trading

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Guest epic research

Sell gbp/inr below 102.61 tgts 102.49, 102.34 sl 102.76 (cmp 102.67).

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My current view of GBP/USD:

 

Place Order to Buy GBP/USD @ 1.6627

Stop @ 1.6567

Close ½ @ 1.6657, move stop to breakeven

Close rest @ 1.6850

 

I expect the U.S. dollar to continue to sell-off in the coming week as traders readjust their positions in reaction to the latest non-farm payrolls report. All of the major currencies should benefit from dollar weakness but with a busy U.K. calendar next week, GBP/USD is in play. The currency pair is trading near its 2 year high and if this level is broken, it could be smooth sailing to 1.67.

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Technicals

 

Monthly

I expect any drop onto the ascending magenta TL to have triggered a support that would allow for price to break north of the 61.8 FE. This currently seems to have been verified, with the monthly candle, so far, appearing very strong.

I would not be surprised to see price hit the 76.4 Fein the coming weeks, and thus also break the resistance zone that was last seen in February 2011.

 

Weekly

The drop a fortnight ago onto the ascending magenta TL provided a very nice pin to play off. Last week’s surge acted like a rocket up Cable’s arse; the current breather at the high of two years ago maybe allowing for Cable to enjoy the view.

 

Daily

Again, the kiss of the ascending magenta TL was a little undecided, with the ascending Guppy profile being broken for a few days.

Thankfully Carney’s blarney helped out… amongst the plethora of fundamentals flying around.

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CBC News - Uncertainty grips Ukraine military in Crimea

 

I think tomorrow's vote will trigger a chain of political unrest, beginning with the veto from Russia about the "illegal" vote and China's abstain. I would think that these two powerful countries have something planned. Isolation of Russia does not mean that Russia is alone. They still have China as a powerful ally. With these in mind, I'm struggling to see how GBPUSD will continue up soon. Reason being, in a situation of political unrest the market seems to see GBP as a risky currency and tend to switch to "safe haven" JPY, USD and gold. Perhaps, I will stay away from GBP and switch to easier pair, XAUUSD

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Ive been looking at hourly and monthly chart. Hourly looks like its hits support three times and that we are looking for a retrace upwards but monthly looks like we are about to start a downward trend. Am I reading this right?

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--------------------------------------------------------------------------------------------------------------------------------------

 

I think GBP has been running on fumes and will lose some ground.

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The best selling (for a while) is likely in May,

as its always in May

maybe not for the Dow (although last yr was likely only an anomaly as too many were predicating it on tv)

 

but for the GBP and Euro, they nearly always sell-off in May

how far is anyone's guess - but both the GBP and Euro need a fairly decent pull-back, otherwise both may harm exports in the near future,

the Central Banks may finally give the nod for a bigger pull-back to Weekly support,

but will have to see....

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1.7000 seems to be very real number by the end of the week. I am not trading gbp/usd at these levels though. Better wait for corrections to buy or clear technical reversal patterns to sell. Non Farm payrolls could help push the pair to critical 1.7000.

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What Could Drive GBP to 1.70

As we have seen over the past week, it does take much to drive the British pound to fresh highs. Despite slower growth in construction activity during the month of April, sterling held onto this week's gains, ending the day just shy of its 4.5 year highs. Based on the overall momentum of the currency and the weakness of the U.S. dollar, we would not be surprised if GBP/USD hit 1.70 in the coming week. There's no shortage of catalysts including the PMI services report, industrial production and trade balance. If service sector activity accelerated last month, it could trigger an extended rally in the currency. The Bank of England also has a monetary policy announcement but they are widely expect to leave policy unchanged which makes it a nonevent for the British pound. Softer U.S. data or dovish comments from Janet Yellen could also drive GBP/USD higher. Its worth noting that speculators took profits on some of their long sterling positions this past week when the currency pair struggled to break 1.6850 according to the CFTC but now that it has, we would not be surprise if those long positions were reloaded.

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It might have bottomed near term at 1.8834/36 and managing to rally beyond 1.90 again. And if someone expects this, he may not be wrong because stochastic made a positive cross, a doji plus a bullish candle but thats not too enough.

All in all..Bullish trend is not confirmed, it has to make a close above 1.8967, things are pretty much trapped within 1.8834/36 low / bottom and 1.8965/67 high / top. And only IF bears enter to take control now and push prices lower again, most likely we will break the 1.8834.

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Breakout in the GBPUSD began at the beginning of September 2013. It was then the daily price, around the 1.55 handle, bolted through the 200 day SMA, and commenced the 1500 pip trek to the cusp of 1.70. It should be noted the OI in the CME futures market was about 150K in early September 2013, 90K less than the current OI.

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Asians are slowly getting ready to break the low on eurusd, just look at the PA. I think the asian session will end somewhere around 1.3570, so if I'm lucky, I will be able to close my gbp short under 1.67, the deeper, the better. I will feel more comfortable long, because USDX daily is preparing for a drop, so both eur and gbp would spike up. Curious if tomorrow goes as expected, I will probably set the SL for a little profit and wait it out.

 

EDIT: SL set at 1.6754, TP 1.6665, but I will probably stay up to check on it and close below 1.67 if needed or move SL to 1.6703 once it breaks down.

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The main resistance zone for the GBP/USD is between 1.7040-50. While the currency pair broke through this zone today, it ended the North American trading session right near it, which means that it has not experienced a clean break. Technically, we really need to see GBP/USD close above 1.7050 to open the door for a stronger move to its next resistance level near 1.7350, the 50% Fibonacci retracement of the 2007 to 2009 decline. We think this will happen eventually but if GBP/USD fails to close above 1.7050 in the next 24 hours, a deeper retracement is possible for before a stronger move higher.

gbpusd62014.png.9ba37e9562635d4f4dcf4f25556383bd.png

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Price range still between the support and resistance 1.7000 and 1.7060 i think its hard to predict a trend without a break. price is going to test resistance again so i hope we can have a break over resistance line so we can see 1.71 levels ..

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