Sup? It’s been a while since we had a setup for GBP/USD, huh? Well, check out that there descending channel on GBP/USD’s 1-hour chart. Ain’t that fine, dawg? Anyhow, the pair appears to be hesitating after hitting the channel’s support area. And it just so happens that the channel’s support area sits right smack on the 1.2000 major psychological level. There’s therefore a chance that support may form here. Heck, enough buyers may even jump in to send the pair higher to the area of interest at 1.2140.
Going long is a counter-trend setup, though, so only those of ya who are gangsta enough should even try. For the more conservative forex traders out, y’all may wanna wait until the pair reaches 1.2140 and then go lookin’ for some shortin’ opportunities. Know what I’m sayin? Be ready to bail out if price attempts an upside breakout while smashing past 1.2300, though. Although that’s an unlikely scenario for now.
By the way, see that gap there? If price doesn’t close that gap and goes below 1.2000, then that means that bearish bias is strong. And all the more so, given that stochastic be indicating overbought conditions and all that. If that happens, be ready to look for opportunities to sell, especially if a downside channel breakout occurs.
A long time ago (December 22, 2016), we found a descending triangle for NZD/JPY and we wuz lookin’ to short the pair. Well, a downside breakout did occur but instead of 100 pips, we only got us 60 pips because the pair found support at 80.80. After that, the pair started trading sideways while also respecting resistance at 81.80. In the process, that there 100-pip trading range or rectangle pattern has emerged. Presently, the pair is at the rectangle’s support area. So if y’all be planning to trade within the range and all that, y’all better start lookin’ for opportunities to go long. And all the more so, given that stochastic is currently making its way higher after visiting oversold territory. Do note, however, that them moving averages just recently crossed-over into downtrend mode. There’s therefore a small chance for a downside breakout, so y’all may wanna plan for such a scenario as well. And as always, just make sure to practice proper risk management, a’ight?
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.