Pick of the Day: GBPUSD
Good evening! I thought I'd end the week by throwing out a trade idea on GBPUSD. The US Dollar rallied on Thursday as a drop in global equities caused a run to the Greenback. Will we see more risk aversion trades into the weekend?
I have the hourly chart up on Cable and there are a few arguments for a further move down. First, we can see a break of the rising trendline, which drew in more sellers before finding support around 1.6600. The pair is currently retracing, so I used the Fibonacci tool to find potential areas of resistance. It looks like any where in between the usual Fib levels would be a great place to take a chance on a reversal lower, but I think I am going to go aggressive and jump in at the 38% Fib level. My stop will be above the rising trendline and the 61% Fib level. My target will be the swing low at 1.6600.
Short GBPUSD at 1.6700, stop at 1.6800, tp at 1.6600
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
No major data points for Friday, so technicals should work out for the day, plus I think risk aversion will continue as traders take off risk into the weekend and ahead of the holidays. I will close my open orders or open position before the end of the Friday trading session.
Stay tuned and good luck!
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Archived Comments (3)
Forex Blog: Pick of the Day
I think its valid. I trade the 4hr and daily, and buy the time price hits your entry, the 4 hr stochs should be comming out of overbought territory which would still correspond w/ daily stochs and the daily trend (which also match the weekly)
I set up this exact trade earlier myself. Nice to see that I'm on your wavelength. I have learned so much from you Pipcrawler, and from Babypips as a whole.
Thanks for the comments guys! MonsterTrader, thanks for you insights...it's too bad 1.6700 wasn't tested before the big drop in the Euro session. Pipwolf, one of our greatest joys is hearing that we have helped...Thanks!