I'll be scouring the charts for "actionable masterpieces". These will be signficant chart patterns or set-ups that I feel are not only tradeable, but also have a high probability of making big profits with little risk. Whenever I spot an "actionable masterpiece", I will post an annotated chart (my chart art) along with an explanation. My goal is to help you learn how to spot these low ocurring but highly profitable "actionable masterpieces" yourself.
Sell GBP/USD
I'm looking for the pound to get pounded. The Fed mafia cut rates by 50 basis points last month, it looks like the Bank of England is next. With all this craziness going on in the global financial markets like Northern Rock, banks have become risk averse which increases the cost of debt for businesses and consumers.
This unexpected "tightening of monetary conditions" aka "hard or expensive to get dough" should motivate the BOE to cut rates either this month or next month. Any expectations of a rate cut (whether true or false) is bad for the pound.
On the daily chart, Stochastic has "turned over" and looks be headed down out of the "overbought" region. There is bearish divergence with price making a higher high while Stochastic does not.
I'm going to short at 2.0440. I believe this pair will try and retest today's US session high. My stop loss (SL) will be 2.0520. My profit target (PT) will be 2.0100. If this pair can break recent resistance-turned-support at 2.0350, I expect the sell-off to accelerate like a mofo. As usual, I will post any trade adjustments in my comments section below.
Sell GBP/USD @ 2.0440 | SL: 2.0520 | PT: 2.0100
