Update: Time for Another GBP/USD Bounce?

Thanks to a bit of risk appetite following Janet Yellen’s speech, GBP/USD was able to break above 1.6450 and make new monthly highs.

GBPUSD

I didn’t pass up the opportunity to finally enter a potential leg higher. After all, I have already waited until after the BOE interest rate decision, NFP report, and Yellen’s speech. That’s too long a wait for such a good setup!

This week we still have Mark Carney‘s quarterly inflation report where he’s expected to make adjustments to the BOE’s forward guidance. Analysts say that it could weigh on the pound if he signals a longer wait for a rate hike. Alternatively, he could also upgrade the bank’s growth forecasts and boost the pound higher.

I risked 0.50% of my account, entered at 1.6468 yesterday and placed a 200-pip stop (almost a full weekly ATR move away). I don’t have a profit target yet but I’ll be aiming for at least the previous highs near 1.6700. I’m planning to add another 0.50% position if Carney’s speech turn out to be pound bullish and tighten my stop if the pound starts to weaken across the board.

What do you think? Will the quarterly inflation report out to be bullish or bearish for the pound? Let me know what you think about opening up pound positions! 🙂

XOXO,

Huck

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  • Mike S

    I personally would not take this trade, not because I am bearish the pound, nor bullish the dollar (at this point). My main concern would be inflation, which has been running a little high in the UK, is seemingly working its way back to within the bank’s 2% target band. Therefore I see no real reason for the bank to raise its inflation expectations. I will refrain from rambling on and on about my views on the UK economy. In short I would like this trade a lot better if you were prepared to buy a dip in the event the GBP sells off, and use a stop loss sub 1.62500.

    • Hucklekiwi Pip

      Thanks a lot for your two cents! Based on Carney’s inflation report the BOE isn’t too worried about the rising inflation just yet. Maybe they’re really focusing on jobs for now. But yeah, I would have liked a better entry for this position. Now I’m thinking where I should place another position. Got any ideas? 🙂

      • Mike S

        First of all congrats on your winning trade!
        At this point I would probably be willing to buy a pull back to 1.64500 with a stop around 1.63700-500 range. Also a break above and retest of 1.6600. On the latter of the two entry points you have a lot of options for a SL given your entry point. Are you only looking to add exposure to the GBP against the USD?

        • Hucklekiwi Pip

          Yep, I’m only looking at GBPUSD for now. It’s currently trading just above 1.6600. Waiting for that cool break! 🙂

    • Max

      Mike,

      I could not have said it better myself and ditto on the 1.6250 level.

  • Nada

    Wish you all the best. If it was me, I would wait to see today’s inflation report,then place the trade, like this you are 50:50, but no risk no gain 🙂

    • Hucklekiwi Pip

      Hi! Did you enter after the inflation report? Luckily GBPUSD went in favor of the bulls this time haha

  • jabby

    In my technical analysis it’s the best time to buy with 200 pips away

    • Hucklekiwi Pip

      Yep it does look good on a technical basis. Let’s see if it meets your 200-pip mark!

  • new trader

    hi
    i want to do trade but have 2000.00GBP .is it OK start trade ? Any good suggestion for beginner . please help me to do trade if you get chance .

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