GBPUSD retrace trade

[dmedin]

Uh-oh ...😱

[Mercury]

Somewhat similar to USDCAD, GBP has made a Channel breakout and current retest of the breakout zone.  Can't declare it as failed yet and we could see another small dip before a rally away, which also probably requires further USD weakness to trigger.  Wonder what EURUSD and DX is doing...?  

[Mercury]

Slow progress on this one so far but still heading up.  EURGBP is still going up too and until this pair turns we are unlikely to see GBPUSD hammering up but when it does turn then I do expect GBP to go hard in a wave C to about the 13,700-14,000 level.  Unlike EURUSD, which should conform to an A-B-C form retrace the A-B looks to be already done on GBP and a wave C is a much stronger move in general.  The only thing I might expect to see is a strong Pennant or Flag at halfway, that would most likely coincide with EURUSD wave B.

Very similarly to EURUSD I took Longs off the short term channel breakout and failed retest and again on Monday and Thursday last on failed resistance breakout retests.  As this market offers more potential than other options I will be focusing my attention here to exploit the possible 1000+ points on offer in anticipated wave C.

 

[Mercury]

After a retrace bearish move GBPUSD is coming up on a couple of key resistance levels.  A break of the top one would result is not that much resistance until about the 13200 level.  Supporting this is the EURGBP breakout to the Bearish side in play as I write.  Long term prognosis remains unchanged.

[Mercury]

This pair didn't have the juice to breakout today and like EUR has reversed, likely in a wave C to conclude a retrace move that ought to carry to below the Wave A point (12650).  For my money it will at least make the Fib 62% but the Fib 76/78% is also likely, these lines of support straddle the original channel breakout point.

[phillo]

My last chart on this timeframe showing the period since brexit.   I still think that yellow line level needs a retest, but that may depend on any Fed action, we'll see

[Mercury]

Last ditch support for GBP as it hits the Fib 88% (fairly rare) turning point.  Usually the game is up when we get past Fib 78% and it could still be but the late rally on the 1 hour chart gives a bit of hope that this market, aligned to other similar pairs, is turning.  As with EUR I would like to see a short term 1-2 move and rally away to confirm.

[phillo]

On ‎13‎/‎06‎/‎2019 at 06:31, elle said:

My last chart on this timeframe showing the period since brexit.   I still think that yellow line level needs a retest, but that may depend on any Fed action, we'll see

trying to break the "May low"  , then the yellow line below

[Mercury]

GBPUSD drops down to execute a turn on the Fib 88% to complete an A-B.  If this holds (i.e. a break through the 12,430 support zone does not occur in the near future) we can expect a fast rally wave C.  PMD and a credible EWT A-B-C retrace form supports the rally.  Might see a small 1-2 before a large rally gets going, although I can see a bit more to go in the initial wave 1 yet.  Buy the dips as the Fed reenters the currency wars.

I am Long off the Fib 88% turn and stop protected just below against a deep 1-2 retrace.

[Mercury]

As with EURUSD, it seems like GBPUSD has also made a turn but this time off a deep wave B retrace to the Fib 88% zone.  EWT labeling up to a wave 1 (light blue) is sound (albeit another leg up cannot be fully ruled out) and there is NMD at this turn point.  We are close to a retrace pattern right now, just need to drop below the previous short term low.  Fib 62% is looking likely for retrace completion and this would fit with EUR and EURGBP where the 3 third side of the Triad is in a retrace rally (i.e. EUR is stronger OR lagging GBP for now).  I think a turn on the EURGBP pair could signal a reversal of that lag and may be an advance signal of a retrace end on the two USD legs of the Triad.  At present this is looking like it could resolve today unless there is another leg up.  Barring that next week is set fair for a USD Bear.

[Mercury]

Looks like the retrace was quite shallow (Fib 38%) which is consistent with a strong rally phase (Wave C type).  We have just had price poke through the recent high to make a higher high and complete the A-B-C retrace and rally.  If this is a 1-2 (which stacks) then next stop could be the 13,400 area for a possible Flag consolidation phase before the next run up to the 14,000 area to complete the retrace but lots to go before we hone in on that, for now I am looking for the next 2 resistance zones to be cleared in short order, a break above the 12,800 and we are game on.

[Mercury]

Strong move from GBP this morning after a brief period of retracement.  A break through 12,800 zone leaves not very much in the way of resistance until the potential Flag consolidation zone (Fib 50%) around about 13,400.

  

[Mercury]

This pair didn't quite make the breakout I was tracking and in fact went into a retrace, which has brought up a potential 1-2 completion at around the Fib 38% zone today.  I have a nice EWT labeling on the 1 hour chart that perfectly calls out a wave A-B-C and turn at support and now in a rally away.  A breakout past the wave B (Light blue) would be bullish for me but a safer bet would be that 12,800 zone breakout I referenced in mt previous post.

On the Daily it looks like a nice 1-2 in a bullish move (i.e. not too deep), if it closes like this of further up but of course the day isn't done yet...

I remain medium term bullish and Long GBP (and EUR and CAD).  On the latter we make get a short term counter trend move if Oil goes bearish.

  

[Mercury]

Referencing my post on EURUSD for overall USD backdrop and the fact that GBP did not rally away but in fact put in another sharp drop I question whether the retrace is done yet.  It could still be done even if EUR does drop, these markets are not joined at the hip.

So the options then are:

1. the retrace was done around the fib 38% and we see a rally away through overhead resistance to kick off a strong rally phase
2. the retrace is not quite done and will drop down again, likely to the Fib 50% before that rally phase gets going

 

[Mercury]

GBP also seems to be at a pivot point.  Will it hold here and rally?  If it doesn't the Medium term retrace rally scenario comes under pressure.

[Mercury]

Both GBP and EUR dropped further, with GBP approaching the previous low people would be forgiven for turning Bearish but the swing traders tenet is to buy weakness and GBP is currently stopped at the Fib 78% in a descending channel that looks like it could be a wave C of a retrace, albeit a deep one.  Given GBPs propensity to be spiky and to go deeper on retraces than EUR I wouldn't be surprised to see a test of the Fib 88%, which coincides with the Daily chart fib 88% and the bottom of the channel.  Otherwise a breakout of the channel would probably signal a confirmed turn.  There is good PMD in play but again this could also support another leg lower.

 

[Mercury]

So another leg down then and GBP hits a critical juncture with a touch on a support zone with 2 Fib 88%s (one off the wave 1 Blue low (see previous charts) and one off the wave B (Green) low.  I am always interested to see a confluence of 2 Fib drawings as the likelihood of it being meaningful is enhanced.  There is also good PMD at this point on the 1 & 4H charts and Strong PMD for the Wave 1 (blue) and Wave B (green) turn on the Daily.  However there is a larger picture alternative scenario that calls for a lower low on both GBP and EUR before a rally so care and close stops are required if taking a position now.  As a result I prefer to wait for a breakout of the channel and ST overhead resistance.  This we might get with strength and conviction on the forthcoming USNFP release.

[Mercury]

GBP looks similar to EUR but there is one critical difference, which is that GBP price is very close to the previous low (labeled wave 1 blue on my charts).  If that low is exceeded then alternative scenarios present, including: the wave 1 will be just a little lower or we have had the 1-2 retrace and now we get the final leg of the big bear.

But before all that we need to see whether the market turns just short of the wave 1 to complete a wave B (green) or not.  If it does and EUR continues to go down further to meet its likely support then EURGBP would complete the Bearish turn it is teasing me with currently.

The charts remain unchanged in terms of the long term set up in that all my indicators still point to a larger retrace rally but I do expect another leg lower on the 1 & 4H charts and maybe a double bottom before that strong rally.  A break below the wave 1 (blue) low and an accompanying break of key support on EURUSD would negate the retrace rally scenario; at that point I would switch to a Bearish stance but we are not there yet. 

[Mercury]

As with the other main USD pairs GBP looks to have broken a short term pennant and will likely make a new lower low on this wave.  Currently I expect this bearish move to stop short of a larger scale lower low to complete a wave B before a hard rally.  A break below the previous low negates.

[phillo]

On ‎17‎/‎06‎/‎2019 at 18:29, elle said:

trying to break the "May low"  , then the yellow line below

getting close

[Mercury]

GBPUSD also turning and looks like it is turning stronger than EUR at present, which bodes well for my EURGBP Short trades (see Triad thread).  I have been tracking this pair for a double bottom wave B (green), which is where we are right now.  A break below the green line would have negated the current A-B-C set up but so far that has held and the double bottom offered an excellent low exposure Long entry opportunity, which I took.  There is PMD across the board, which is very encouraging, and a breakout of the descending channel (2 upper line placement options) is in progress.  A break of the overhead resistance will be important and as with EURUSD I am looking for a 1-5 up followed by an A-B-C retrace before this rally really gets going.

 

[Mercury]

Similar story on GBP as with EUR with an A-B-C retrace potentially in play.  Here though I a tipping the Fib 62% as the most likely retrace turn point, which would be consistent with the breakout on the pink channel line and an A-C equivalence in length (a typical feature within EWT).  However I cannot rule out a test of the lower line (grey) at the Fib 76/78% so again price action will be key to deciding.

[Mercury]

My wave 1 placement was premature, no matter, another leg up is fine and the further the wave moved the more secure my breakout Long trades will be.  Don't know when or where the first wave 1 will conclude and don't care as I am not seeking to trade this short.  I am waiting patiently for a sufficient retrace to add to my current Long positions and patience is the key thing here.  On the Daily the bounce off support has been decent and so far looks good for a turn.  Do need to see that short term 1-2 and rally away to confirm.

 

[Guest GUOLIG]

На 13.07.2019 в 17: 05, Меркурий сказал:

Мое размещение волны 1 было преждевременным, независимо от того, другая нога в порядке, и чем дальше волна переместится, тем более безопасными будут мои длинные сделки.Не знаю, когда и где завершится первая волна 1, и мне все равно, поскольку я не стремлюсь торговать этим коротким.Я терпеливо жду достаточной ретрации, чтобы добавить к моим текущим длинным позициям, и терпение-ключевая вещь здесь.На ежедневной поддержке отскок был приличным и до сих пор выглядит хорошо для поворота.Нужно увидеть, что короткий срок 1-2 и ралли прочь, чтобы подтвердить.

 

 

[Guest GUOLIG]

On 13.07.2019 at 17:05, Mercury said:

Мое размещение волны 1 было преждевременным, независимо от того, другая нога в порядке, и чем дальше волна переместится, тем более безопасными будут мои длинные сделки. Не знаю, когда и где завершится первая волна 1, и мне все равно, поскольку я не стремлюсь торговать этим коротким. Я терпеливо жду достаточной ретрации, чтобы добавить к моим текущим длинным позициям, и терпение-ключевая вещь здесь. На ежедневной поддержке отскок был приличным и до сих пор выглядит хорошо для поворота. Нужно увидеть, что короткий срок 1-2 и ралли прочь, чтобы подтвердить.

 

Извините, я хотел поблагодарить вас за анализ фунта. И оказывается , что ваш график случайно ly появился в окне сообщения , я снова сожалею. СПАСИБО ЗА ПОДРОБНОСТИ !

[Guest GUOLIG]

Excuse me I wanted to thank you for your pound analysis. And it turns out that your schedule accidentally appeared in the message window I'm sorry again. THANK YOU FOR THE DETAILS!

[Mercury]

Thanks @GUOLIG alas I cannot read Greek (I think that is Greek anyway...)

Looks like the retrace I was looking for is in play now.  Where will it stop and turn (or will it just break on through to make new lower lows and thwart me yet again?) well let's wait and watch the price action for the telling of this tale.  The beauty of getting in early on a turn is twofold: first you get to hold positions against a very deep retrace; second the exposure, if wrong, is very low.  That is the position I am in on this market and on EUR an AUD so I can sit back and let it all happen.  AUD is especially strong just now.

As for GBP, well we saw a turn at a resistance zone after a 1-5 up on NMD, which bodes well for my medium term prognosis for a significant retrace rally.  Could be a quick A-B is already done and we are in a swift wave C down to wave 2 (light blue) turn.  EUR is lagging at present so watching the EURGBP third leg of the Triad could assist in pinpointing the turn (if it comes).  At present GBP is looking weaker but the key to this is buying that weakness at the right moment.  Currently I still favour either the Fib 62% or Fib 76/78% zones but let's see how the after noon progresses.

[Mercury]

Thanks @GUOLIG alas I cannot read Greek (I think that is Greek anyway...)

Looks like the retrace I was looking for is in play now.  Where will it stop and turn (or will it just break on through to make new lower lows and thwart me yet again?) well let's wait and watch the price action for the telling of this tale.  The beauty of getting in early on a turn is twofold: first you get to hold positions against a very deep retrace; second the exposure, if wrong, is very low.  That is the position I am in on this market and on EUR an AUD so I can sit back and let it all happen.  AUD is especially strong just now.

As for GBP, well we saw a turn at a resistance zone after a 1-5 up on NMD, which bodes well for my medium term prognosis for a significant retrace rally.  Could be a quick A-B is already done and we are in a swift wave C down to wave 2 (light blue) turn.  EUR is lagging at present so watching the EURGBP third leg of the Triad could assist in pinpointing the turn (if it comes).  At present GBP is looking weaker but the key to this is buying that weakness at the right moment.  Currently I still favour either the Fib 62% or Fib 76/78% zones but let's see how the after noon progresses.

[Mercury]

GBPUSD is taking it to the edge these days, last time a potential Wave B (green) just off the previous turn (wave 1) and now a retrace all the way to the Fib 88% and the previous 1H/4H channel breakout support zone.  This is a critical moment for GBPUSD, will it now rally away from this support or break through to make new Daily chart lows?  EUR is lagging and AUD remains strong, although I expect a retrace on the latter at some point.

[MYK1]

Stopped me out second time hope this time it will bounce up with power and don't look back lol🙄