I told you guys in my Pre-Week Market Analysis that I’m bullish for GBP/USD. Well, my bias still hasn’t changed.
BOE MPC member Martin Weale’s dovish remarks, expressing his support for further QE, sent the pair lower yesterday. However, I don’t think the chances of this happening are very, very slim. And so, I think that GBP/USD is still a good buy!
But of course, I will not ignore what I see on the charts and what is on tap for the pound today.
On the hourly timeframe, we see that the pair is consolidating heavily just above the 200 SMA and the 50% Fibonacci retracement level. I checked the forex calendar and found out that the second reading for the U.K. GDP report will be released in a couple of hours. It may just be the catalyst that markets are waiting for!
I don’t exactly know where price will go so I’m going to be prepared with whatever is thrown at me. I’m going to set both a buy and sell order. When one of them gets triggered, I’m going to immediately close the other one and just ride the move.
To be specific, if price rallies strongly when a better-than-expected figure is released, I’m going to buy 1.5625. On the other hand, if price falls and breaks through the 200 SMA following a disappointing figure, I’m going to short at 1.5560. My upside target will be at 1.5700 with my stop below yesterday’s low at 1.5560. Meanwhile, my downside target will be at 1.5450 with the stop above yesterday’s high at 1.5625.
There ya have it! This is my trade idea. What’s yours?