Jump to content

GBPUSD retrace trade


Recommended Posts

Trading is a frustrating enterprise @MYK1, as many people point out, losses are part of it.  If you have good stop placement and you get taken out then this ought to have been a loss you were willing to bear (i.e. doesn't kill your account).  It also means you can start fresh.  In the case of GBPUSD the red line is around 12430.  Below that a new set up must be sought (either a new wave 1 bottom or the beginning of a big drop (which ought to be mirrored in other pairs like EUR and AUD with a big rally in USD).  Note, in my book it is perfectly feasible for GBP to put in a new wave 1 (and/or double bottom) and then rally but I would not hold a Long below the red line; I would wait for a new set of signals.

Just for info, I did take a Long back at the breakout of the 1H channel, with a stop just below the red line, which I am still holding for a minimal loss if taken out.  I did not add any further positions as I was expecting a pull back (EWT technique), and recent history suggested it would be a strong one (it clearly is, or will break lower...).  That leaves me in a Long already so I will not think about trading another Long until I see a credible turn.

As I noted on my EURUSD thread, there is a lower low (for a lower wave B) scenario there too, which must be watched as this is the main USD mirror.  In addition, EURGBP has now put in a higher high and is approaching the long term overhead resistance trend line so ideally we need to see that turn for my lead GBP scenario to bear fruit.  I will post on my Triad thread in due course.

Net then I would not be going Long on GBPUSD until I saw a turn on price action, that ideally was backed up by other pairs (especially EURGBP, which means EUR could go lower while GBP rallies).  Any Long should have a stop just below the red line (12430) as you don't want to carry the position into white space.  It is all about minimising exposure and money management really.

Link to comment

IF EURUSD is turning then could GBPUSD turn as well?  A lower low yesterday is intuitively suggestive of a break lower but often this is a Bear trap situation, and the Bears certainly gathered their strength to push lower yesterday.  However the Daily chart shows a potential ending narrowing channel, which if valid has stopped the price action.  Also price is currently in a long term support zone (check your weekly chart on this).  In the rally scenario we could see a few tests of this level before any breakout either way but if EURUSD does rally and if AUDUSD continues to show strength and if USDCAD continued to go Bearish and if bearish signals on USDJPY prove valid then I can't see GBP bucking the trend.  I am looking forward to the COT data, which has been trending steadily net negative on the Non Comms side.  I am betting we will see a very negative read from yesterday, which could spell an contrarian buy trigger.  EWT count is good for a wave 1 and there is lots of PMD on all charts.

GBPUSD-Daily_170719.thumb.png.5e13bf8bbf23b3a205ec7ad6a4b3a918.pngGBPUSD-1-hour_170719.thumb.png.472f57de37426b718d7c86acd24e233c.png 

 

Link to comment

So far the wave 1 (Blue) has held as a potential turn and now I have a 1-5 rally followed by a deep retrace to the Fib76/78% and today a breakout of a short term channel on that retrace.  Clearly a break through overhead resistance of the daily chart channel line and horizontal resistance level will be important to confirm this as a sustainable rally scenario.  With USD possible at a bearish inflection point (see also EURUSD, which is lagging GBP - hence my EURGBP shorts are working well).  If all of this plays out then the rally is on.  Let's see...

GBPUSD-1-hour_240719.thumb.png.c8214718704d0345595c63aa0c2a2631.png

Link to comment

This is the chart set for GBPUSD as related to the EURUSD ones posted separately.  There is a striking similarity between them on the Weekly Chart, despite recent GBP relative weakness.  Perhaps this is unsurprising given a period of relative GBP strength prior this.  As with EUR and USD-DX this pair is at an important Support/Resistance level.  While another leg down to the next level resistance cannot be ruled out this market appears to be at a more extreme edge that EUR.  If you add the Bollinger band on the weekly chart you will see that the previous 2 times the market spiked down through the lower band line to touch the channel line but closed on or inside the band.  The market has currently done that again, will it close back within the band again?  If it does a rally is likely to be on.  There is not PMD on the Weekly here but crucially there is on the Daily and Hourly.  This one is a more extreme trade but I have gone long off the touch and rejection of the Weekly line with close stops below.

GBPUSD-Weekly_300719.thumb.png.beb4e1e1bc201e45d0bacf3fd0aa3b74.pngGBPUSD-Daily_300719.thumb.png.d6dcbe1adfa531e01ad6ebb1d78f4cae.pngGBPUSD-1-hour_300719.thumb.png.057b663cdb6ea9cdb947aaad43531431.png

Link to comment
  • 2 weeks later...

GBP has been idling for some time, not joining other pairs on respective short term moves.  With a slew of UK data coming out at 09.30 maybe this will trigger a breakout.

This market is fairy straight forward right now in that it either breaks through support into a new bearish phase (re-evaluation time for me) or rally hard out of this support zone.  I am leaning to the latter, especially if EUR also rallies out of its consolidation phase.

GBPUSD-4-hours_090819.thumb.png.df7a646b95b2bdb65b3f1b4a008cc9d2.png

Link to comment
  • 2 weeks later...

Strong bullish move in the past few hours on GBPUSD, less so on EURUSD but it is there too, despite the Italian PM resignation, so much for the news (maybe bad news is good news for FX as well as stocks...

Anyway, regardless of the whys and wherefores, the price action looks like a retrace to the Fib 62% (in A-B-C form) after a decent rally away from support on PMD for a potential wave 1 (blue) turn.  Will need to see a break of overhead resistance and of the daily chart upper channel line to get serious but for now I am happily Long off the fib 62% turn.

GBPUSD-4-hours_200819.thumb.png.aa4b5a54f5d9970eea3fb48ce04850ba.png

Link to comment

GBP looks to be leading the way against USD.  The daily channel resistance trend line was reached and rejected initially but now price is making a second attempt.  A breakout here will be significant I feel if it is with some strength.  Ideally would like to see EUR and possibly also JPY do something similar.

GBPUSD-Daily_270819.thumb.png.88da6ebf83161804b6c244917763c57b.pngGBPUSD-1-hour_270819.thumb.png.37d948eae55727f30e3ed208566ef50e.png

  • Like 1
Link to comment

If you have the patience and don't feel the need to be "in the market" constantly @dmedin then trading the breakout is the way to go in my book.  This is why I focus on longer term swing trading, although I like to spot the trend change early and get set up earlier than the breakout to create a base from which to pyramid a breakout move.  If this is the move I have been chasing all this time then I will be in good shape.

As to whether this is a counter trend trading opportunity or not, my view is yes it is but it is a significant one, a major retrace potential.  That said there is a view out there that EUR in particular is due a big move.  I still think USD will go bearish for a while but will rally hard as a safe haven in due course.  How to decide when this might be is what the recession watch stuff is all about. Quite apart from it being an obsession, as some have suggested, it is, to me, a sensible thing to keep a weather eye on.  In fact I would say to ignore it and trust to the never ending bull is obsessive, but that's just me...

  • Like 1
Link to comment

Pin bar trend reversal on a key weekly chart supporting trend line & horizontal support zone with Positive Momentum Divergence.  Clean 1-5 EWT count in the daily channel, which is now in the process of being broken to the upside.  Likely to get a pull back at some point, maybe a break and retest of the channel line or breakout zone rather than an internal channel retrace?

A confirmed break above and rally away puts the retrace firmly on with a potential target of 14000 or thereabouts.  It's all about the dollar.

 

GBPUSD-Daily_040919.thumb.png.4d3736f7b1d80a0b9ea9381ed7ff2ea0.png

Link to comment

Channel breakout looks to be confirmed with a short term retrace back to the breakout zone (horizontal support) and fast rally away.  This on some UK economic data positivity but it was happening anyway.  I see the small retrace as a 1-2 and now we should see a fast and long move to a wave 3 (probably consolidation around halfway) prior to completing a wave A (first part of the overall retrace move).

If you have missed it look at EURUSD, which is lagging at present but will most likely follow GBP in due course.  Other pairs AUD, CAD are also running hard, although in these cases I would be anticipating a retrace, which could offer a but the dip opportunity.

GBPUSD-Daily_090919.thumb.png.cb4fe84a1bdcc3fd43f0a390dbab3575.png

Link to comment

GBPUSD rally has been strong since the turn off the lower channel line and associated horizontal support zone.  A break of the upper channel line, a quick failed retest and the market bounced away in a decent rally.  One could be forgiven for jumping on board as FOMO kicks in.  However markets don't go in straight lines and while Longs inside the first channel may be fine any thing above and down to the breakout zone may be at risk from a sharp bearish retrace.  I am looking at a parallel channel and resistance zone close above plus building NMD that could send this market back down to join all the other USD pairs in retrace prior to a strong rally.  Buy the dips is my bias here but I expect a decent retrace to set up the strong wave 3 rally.

GBPUSD-4-hours_140919.thumb.png.7f10dc0d086200955daa9016daf036f2.png

Link to comment
  • 2 weeks later...

Whatever is happening with respect to USD generally, and it looks like we may see a slightly lower low on EURUSD at present, the retrace bearish move I was looking for on GBPUSD seems to be in play.  Key question will be whether it turns in a wave 2 or carries on down.  Shouldn't take too long for this to resolve one way or the other and in all likelihood we would need to see USD fall and EURUSD rally hard for this pair to stop and turn.  Having been stronger for a while I feel GBP may be on the verge of a phase of being weaker than EUR, enough to get the MSM talking about parity and Brexit impacts again...

GBPUSD-Daily_250919.thumb.png.31606e6106bf66d47c268d82feed151a.png

 

Link to comment

GBPUSD version of a similar V-Bottom to that on EURUSD, except that this is on a wave 2 retrace rather than a true trend ending bottom.

The wave 2 turned at the Fib 62% on a failed retest of the previous channel breakout zone and on PMD.  The pair of parallel channels is holding well so far so a breakout of the upper channel line is the next test.  After that we should see a strong move up in a wave 3 (actually already starting of course) towards a probably wave A of the large scale counter trend retrace.

GBPUSD-1-hour_021019.thumb.png.6d4fd2dc4c40f2b811524eee394ce284.pngGBPUSD-Daily_021019.thumb.png.e3161b9de9b10b0becf21664070e2805.png

 

Link to comment

Looks like FX markets like the Tory revised deal, maybe not so much for the Euro traders, although that is all short termism.  The breakout on GBPUSD is similar to the one we saw on EURUSD recently, although it is stronger.  A break of the second (parallel) channel line will be very bullish I feel.

GBPUSD-1-hour_031019.thumb.png.f5c06dcbb67a38afe3899cc8e7a0bb4b.png

Link to comment

GBPUSD was much more definitive and offered much greater reward today with a breakout from the turn at the Fib 62% on PMD.  The wave C was unusually short (or A was unusually long) but the Fib levels came to the rescue for me and I was able to trade the swift breakout move Long and early, now stop protected at BE.  My risk was rewarded when price broke through the parallel channel line and closed above it.  We may see a short retest of the breakout level but as this is a wave 3 I wouldn't count on it.

GBPUSD-Daily_101019.thumb.png.8a53262b3c835e43cc0ab2e381e3ad65.pngGBPUSD-4-hours_101019.thumb.png.8891c1f9de23203d5b15c29c50980b4d.png

Link to comment

The parallel channel breakout was confirmed in fine style yesterday with a close far above the breakout zone.  I had already gone Long much lower so didn't need to sweat that but the confirmation suggest to me that the Fib 62% is a likely target for a wave A of a large retrace that could test the long term resistance trend line up around 14000, which would also be the Fib 76/78%.  As I have mentioned on my EURGBP thread I have been anticipating a contrarian GBP rally against the Euro, while the MSM zeitgeist called for parity, and we are getting this rally big time now (I think 85p is a reasonable medium term target before any serious counter trend rally.  This means that GBPUSD will rally further and faster than EURUSD, which is certainly the case at present.

GBPUSD-Daily_111019.thumb.png.ff6dc04ef25cc8b5ee5f5296240fc36e.png

Link to comment
  • 2 weeks later...

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • General Statistics

    • Total Topics
      19,501
    • Total Posts
      86,847
    • Total Members
      68,750
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Stevie-U
    Joined 09/08/22 15:09
  • Posts

    • It is still a wonder to me that Central banks do NOT get it, and perhaps industry. Yes, wage increase pressures are present. That SHOULD BE EXPECTED. Yes, companies have reasons to increase their prices. That too IS EXPECTERD. WHY? PRIMARY FACT: Central Banks have FAILED TO CONTROL INFLATION. THERE IS NO GETTING AROUND IT WITH JUSTIFICATIONS. Taking up various "toxic debts" of banks and companies does not solve excess money printing (now called QE). This only transfer's somebody else's debts onto the government side with no exchange in return, and then getting general bond holders to pay part of it by charging negative interest rates. The culprits who CAUSED THE TOXIC DEBITS go scotch free and it encourages them to maintain such bad practices. It is ODD no central banker thinks of things like this that is SO important. So remind me, what are they professional in? Governments are supposed to take care of the general population's financial welfare, not private industries. Handle the excess money printing, you handle the inflation. Interest rates having to shoot up is a sign of past mishandlings, e.g., using ultra low interest rates ever so long incorrectly. It IS because of this that purchasing power of the currency is lost. It is BECAUSE OF THIS that individual wages and price increases need to take place, rightly, to keep up with the increase of the cost of living. Yet governments and central banks worry about wage increases and price increases as a menace. And they try to limit wage increase. Price increases occur but then their customers cut-back on spending as they cannot afford as much. This IS AN INVERSION in thinking by officials. It develops a vicious circle. The primary source of the problem is out of mind, yet it has been so well known for decades. SIMPLE BASICS ARE NEGLECTED, OR JUST MISUNDERSTOOD. THIS APPLIES TO ALL CENTRAL BANKS, who seem to be copying each other in actions. Mervyn King, ex-UK central bank chief seems to be the only one who has some understanding on the problems of central bankers. It is understandable the the BoE wishes not to head into recession or reduce significantly the GDP by attempting to control interest rate increase. But that is misguided in my opinion. WHY? Rates level manage the Macro-economics, loans, savings and mortgages level control. It is the individual company's operating condition that is neglected. Each company may be responsible for it but they (some) can act poorly, cut corners, use creative accounting, unethical practices, no cash flow, huge debts, not growing organically, non-profitable, taking too huge a risk, etc... IT IS THIS AT THE MICRO-ECONOMIC LEVEL THAT THE HEALTH OF BUSINESSES ARE NOT GUIDED. When a plane is in operation, takes off and fly's it is in good hands, with good control. When "things" go wrong and the plane is out of control we have bad control (for whatever the reason). Similarly the ECONOMY IS IN BAD CONTROL . Governments and bankers think Marco economics will "solve" everything  --  it comes out in the way they operate. Letting companies borrow until they have the highest debts ever in history is just one sign of 'bad control'. No banker would over loan a household individual more than he / she can pay back. And oh, they are always made to be paid back. Individual companies can over burden themselves with huge debts yet continue as nothing is wrong, no alarms, no worries. That is, until some economic trigger brings it down and cause an expected domino-effect. But bankers are clever there are government subsides, tax-relief, and transfer toxic debts relief plans in existence, then "all should be well"!!!! REALLY? HISTORY TEACHES US DIFFERENTLY. WHAT IS WRONG? For one, you make the taxpayer pay for others loans, costs, expanses, etc... call it what you will. So industry does not pay its own way as a private industry.  Industry then goes back to the same old bad practices. Then, later, they wonder why the average GDP now is not as good as prior to previous recession!!!!! HEY, HAVE YOU NOT REALISED THAT YOU CHOCKED OFF THE BASIC FOUNDATION THAT INVESTING IS BASED ON.   -----   SAVERS AND INVESTORS. The thinking is something like this: No, we  have to have these existing plans. WE GOT TO KEEP SAVERS SPENDING, SPENDING SPENDING ANY WHICH WAY WE CAN FORCE THEM. WHY, IT IS THE DEBTS WE BUILD-UP  -- IT IS TOO MUCH AND HAVE TO PAY THEM OFF SOMEHOW -  WE GOT TO MAKE THEM PAY....... AND GROW THE ECONOMY OUT OF THIS MESS. BESIDES BANKERS WANT THEIR LOANS PAID, AFTER THEY COLLECTED HUGE INTEREST PAYMENTS OVER A LONG PERIOD, AND SO ADVICE GOVERNMENT HOW TO "SOLVE IT". After all these years we are no better off. And all end up suffering. The western countries, at least, are living beyond their means. THIS IS THE DWINDLING SPIRAL. IT HAPPENS OVERS DECADES.  
    • Hi All, Thanks for your posts.  IG will be booking preference shares on a 1 for 1 basis. Thank you - Arvin
    • Still no response by email or on here, can't get through to anyone on the phone. I would say poor communication from IG, but its literally non existent.
×
×
  • Create New...