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MadMarketScientist

GBPUSD Trading

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GBPUSD has been a stubborn old man recently, giving traders no reason to want to participate in its action. The price has been hella volatile and I'm sure amateur traders are pulling their hair out trying to guess the next move. I believe, and believe me, the 1.60 level might be hit just to destroy the longs, confuse the shorts, and pick up pending orders. If not, the move higher is set.

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Technically we are approaching another level of technical support at the 1.5850/1.5900 area and we are still close enough to the 1.6000 level (50% retracement of the 1.4815/1.7190 bull run from 7/2013 to 7/2014). So while more downside is definitely possible, I see no more than approximately 100 points form current levels and a bounce from here is also not to be excluded.

GBP.jpg.a98adb223bac29f00bbb699793a3236c.jpg

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GBPUSD is a prime candidate to start building long positions in. On a 240min chart we can clearly see the pair respecting 1.61585 and our RSI is moving our of oversold territory to give traders a chance to join the big boys for the long ride home back to the highs we associate with this pair.

From an entry at or around 1.61585 I set my profit target my profit target at 1.64000 and after that, the sky is the limit.

 

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In UK the much cooler than expected inflation data sent the pound reeling with the unit plunging below the key 1.6000 support level in morning London dealing. UK CPI printed at 1.2% versus 1.4% eyed, pushed lower by food and transportation costs. This was the twelfth straight month that food prices have declined helping to put downward pressure on the overall index.

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Dovish Bank of England minutes, a surprise decline in retail sales and a larger than anticipated drop in industrial orders should have taken GBP/USD below 1.60 and while the currency pair made a brief foray below this level today to 1.5995, it rebounded to end the day above this key level. Given the softness of retail sales and the deterioration in trade activity, Friday’s third quarter GDP numbers are not expected to be kind to sterling. Nonetheless the currency pair’s resilience should not be underestimated because 1.60 could still hold (after a brief break) if growth falls short of expectations. Not only is the GDP report backwards looking but economists expect a slowdown in growth so a softer number would not be a major shock. At the same time, with 2 members voting in favor of an earlier rate rise, the Bank of England will still be one of the first countries to raise interest rates. I also believe that sterling is receiving some support from euro outflows ahead of the Eurozone’s bank stress test results, which are scheduled for release on Sunday.

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Pound looks in a slightly better shape than eur/usd, but the end of the story should be the same. It has to go down and reach lower lows in the same fashion as eur/usd.

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So do I.On H4 it looks like a clear trend reversal. I wold prefer to go long on that one.

 

I'll wait little longer until it's clear breaks around 1.54390. considering as major trend, it's could be simply a correction movement, based on their weekly wave.

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I'll wait little longer until it's clear breaks around 1.54390. considering as major trend, it's could be simply a correction movement, based on their weekly wave.

 

I ma not sure. On the daily I see we are approaching a resistance zone, so I think we may consolidate at that level. I will rather try to take profits, and may be to sell around1,56, aiming to get back to the fib broken resistance at 1,544.

GU_H4_001.thumb.png.6c83d37b87596e4d0c219417cf28dde5.png

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I ma not sure. On the daily I see we are approaching a resistance zone, so I think we may consolidate at that level. I will rather try to take profits, and may be to sell around1,56, aiming to get back to the fib broken resistance at 1,544.

 

Well We did not even meet 1,56 before it reversed so I did not have the occasion to sell: the pair did not pass the daily SMA100. On H4 please take note that we are still technically in an uptrend, as long as we do not break the 1,535 last low's line.

 

Still the fib line named 23,6 is a strong weekly support/resistance zone. I would look for signals (short or long) there. A bearish break out oof 1,535 would make me bearish on h4.

GU.thumb.png.818828adf69a44d4c455e8081dc46004.png

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GBP/USD: Will remain guided by EUR/GBP moves

 

Woodcock notes that GBP/USD remains in its range, and the rally in the past two trading days was as a result of moves in EUR/GBP after having traded heavy over the last week. GBP/USD is going nowhere and lacks any momentum, the pair remains well contained, according to Woodcock. He further says that the pair will remain reactive to EUR/GBP moves than any UK events.

 

See more at: EUR/GBP guiding the Sterling, USD/JPY remains a buy on dips | TipTV.co.uk

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