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GBPUSD retrace trade


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On 06/02/2020 at 13:44, Mercury said:

Check out the weekly chart...  Anyone got a bullish scenario?

 

You should manually edit your £ chart....Flash crash was quoted as low as £1.15,  I believe ( but did nt see it myself....market was a cent wide )  I think it was bid £1.15 offered at £1.16 !!  But it will throw out your fib ratios !! 

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38 minutes ago, cheviot said:

willing to believe that this a bottoming formation to test 1.29 before final rally (and C of B ) to retest 1.33 ish

I can see that too, in fact there is a bit of a bid against USD on multiple pairs just now, including the Yen, which will be interesting if sustained...

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Bearish scenario is holding.  A close below 12,900 will be supportive.  EURGBP is rallying on cue.  EURUSD also breaking lower and USDJPY has reversed back into a rally towards closing that gap.  The only pair seemingly set to buck the trend is USDCAD, hmm, I wonder if that would signal something for Oil...

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18 hours ago, dmedin said:

It will come all the way down to below 12700 - one to short next week

Already Short.  I see this as going much lower than 12,700.  At least to retest the weekly trend line that was previously broken, which could occur around the Fib 76/78% level if the A-B-C retrace scenario hold.  My lead scenario is for this phase to be a wave B after which comes a strong wave C.  However one can't rule out a lower low, which is what I see on the EURUSD and with EURGBP set to rally further GBPUSD could easily drop like a stone in the short to medium term.

GBPUSD-Weekly_080220.thumb.png.f163a3bbab9d01243bb627df79b87711.pngGBPUSD-Daily_080220.thumb.png.5dbdb1ba9dca54996319d8be0c710efe.png

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GBPUSD put in a rally off key support, so often the case on a lower low test into such a zone of support/resistance.  However now price seems to be bouncing back off the upper limit of a short term channel and if this is merely a consolidation phase of the slightly better than expected UK data over the past few days then price could shift back into a bear phase that at least retests that zone of support and likely breaks it.  Tactically it is far better to take a Short here with low exposure than to Short into the support zone on a lower low test.

GBPUSD-1-hour_120220.thumb.png.669f4b56c2b797b4bc3d1f1269c34df3.png

 

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8 hours ago, dmedin said:

But on the other hand, this is clearly a downtrend right?

 

You seem unsure and that is not surprising as this market has yet to reveal itself.  My lead scenario is for the bear move to continue to lower lows, a EURUSD has already done.  I might expect EURUSD to get a relief rally and to fall less energetically now as it approaches key support and for GBPUSD, if it turns, to fall faster.  Therefore EURGBP might be the way to go here.  However we may yet see a slightly higher high on GBPUSD and EURGBP has yet to stage a channel breakout.  If you look at the Weekly chart on GBPUSD price is in a consolidation triangle.  No telling which way this will resolve yet so the best course of action is to wait IMO.  Given the points on offer are not huge vs the risk I'd be more likely to wait for EURUSD and GBPUSD, well USD generally, to resolve before seeking a trade other than a scalp, which I am not interested in.  EURGBP could offer a longer term move once it breaks.

GBPUSD-Weekly_170220.thumb.png.3ea7d9af92a02f8e94cb9460019db9ca.pngEURUSD-Weekly_170220.thumb.png.ce5dd270fc6da877ca24c2216944ec23.png

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USD Gross Domestic Product Price Index (Q4) worst than est 

Prev: 1.5%

Est: 1.4%

Actual: 1.3%

 

USD Nondefense Capital Goods Orders ex Aircraft (Jan) better than est 

Prev: -0.8%

Est: 0.1%

Actual: 1.1%

 

USD Gross Domestic Product Annualized (Q4)

Prev: 2.1%

Est: 2.1%

Actual: 2.1%

 

 

Initial Jobless Claims (Feb 21) 

Prev: 211K

Est:212K

Actual: 219K

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Given the USD weakness, and not withstanding a potential relief rally there, I have changed my mind on GBPUSD.  I now see a failed retest of the previous channel breakout within a consolidation Triangle.  The bottom was reached on Friday at the Fib 50% and since then we have seen some whip saw followed by a rally yesterday and this morning.  I think a break of the upper Triangle line will be compelling and there is a Gap up around 13,200 to be filled along the way.  I see GBPUSD as a more compelling Long than EURUSD as my long term analysis of EURGBP suggests a bear market there.  However EURUSD is likely to outperform in the short term I think.

GBPUSD-Daily_050320.thumb.png.21106770ce77c79196717eaba7e189cb.png

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Following on from my USD post I see GBPUSD as having broken out of that consolidation Triangle afer a failed retest of the previous Triangle breakout zone.  Gap still to be closed above, may happen before or after a retest of the breakout, I'd expect a retrace at some point, which would offer a chance to get in Long.  I see the base for this move of $1.27, a break of which would reverse the trend but hard to see that now.  I see this as a wave 3 or C, which should run and run strong but I still see EURGBP as being bullish so either EURUSD is going to charge forwards of there will be a decent retrace on GBPUSD in the ST-MT.  First LT traget is the channel line around 13800-14000 a break of which sets up a very long rally phase.

GBPUSD-Monthly_070320.thumb.png.1bf19425113090a5d5996f458f43d329.pngGBPUSD-Daily_070320.thumb.png.ed1a55609233206b7016be9b12db1252.png

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