Trade: Time for Another GBP/USD Bounce?

Is it time for another GBP/USD bounce?

GBPUSD

On the technical side the stars – okay maybe just the indicators – are lining up for a bounce. GBP/USD has hit support at the 1.6250 area near a previous resistance and a 50% Fib. Not only that, but Stochastic is almost in the oversold levels. Oh, and price is also near the 100 SMA!

Fundamentally I’m still betting on the strength of the U.K. economy. We might have seen a couple of mixed reports for the past few days but at the end of the day retail sales, employment, and GDP numbers are still healthy and the BOE is optimistic over the economy.

Since I’m trading the daily chart I’m not too shy to wait for a retest of 1.6250 before I enter a position. I learned my lesson from last week’s USD/JPY setup though, so a market entry is still on the table in case I see reversal candlesticks or if Stochastic starts to turn from the oversold region. I’ll probably enter at 1.6250, place a WATR stop, and aim for the previous highs.

What do you think of this setup? Any help would be much appreciated!

XOXO,

Huck

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  • adnan

    excellent explanation of a trade setup… what i have noticed in past 4 years of my trading .. at the end of day PRICE ACTION prevails..

    Good luck

    • Hucklekiwi Pip

      Thanks! That’s what I’m hoping would happen too. Are you planning on trading this one?

  • thenarf

    i think that it will touch the resistance and go through it again, i don’t trust the oversold conditions, i believe that the services PMI will not provide enough momentum for the pair to rebound. There has been a negative trend since the end of July, however lets see what happens. :)

    • Hucklekiwi Pip

      Good call about the PMI not being a catalyst to go higher. GBP/USD does look range-y on the 4-hour chart. Let’s see if it breaks support by the end of NFP week :)

  • thenarf

    *end of January not July

  • isuru1010

    will see

  • Ugochukwu

    Also have in mind that a broadening top formation chart pattern has formed. Just keeping my finger crossed for the retracement on the last down swing to be complete.

    • Hucklekiwi Pip

      Hi! What level are you looking for? I’m thinking if I should enter now that price is near 1.6400.

  • MatthewRG

    I hopped into this trade too.
    There are 2 price rejection candles on the daily chart & the overal trend on the daily chart is an uptrend. The trend is your friend + 2 rejection candles on the support = buy imo.

    My TP is aiming on previous highs.

    • Hucklekiwi Pip

      Cool! Where did you place your stop loss? :)

  • Sebastian

    Also Have a position in GBP/USD, it bounce 3 times in this week session my MA of 100, my real concern is a psychological resistance in 1.6335, I believe if it break it could be a good reversal profit… But tomorrow circus will decide it…

    Cheers!!

    • Hucklekiwi Pip

      GBP/USD is well above 1.6335 now! Is your position still open? I’m thinking of placing my orders now :)

  • Russell Daily

    I’d love to see a close above 1.6350 on the 4 hour chart.

    • Hucklekiwi Pip

      Looks like it’s already above 1.6350! Are you planning to enter? :)

  • M Wahaj Siddiqui

    To be very honest I don’t understand it at all because I am new here in trading field. But for sure I can say that this is very nice and good way to let other’s have a good idea of what’s going on in the FX market. Surely will learn a lot from you. :)

    • Hucklekiwi Pip

      Thanks for reading my updates! I’m sure you’ll find your way around currencies in no time. Don’t hesitate to ask if you have any questions! :)

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