GBPUSD has an interesting setup for our day trading. Where since a few days ago, this pair is moving in an attractive price pattern.
Check out GBPUSD in the following Weekly chart:
Judging from the chart above, it appears that the price of GBPUSD is stuck in the daily movement pattern which reflects the lack of interest in the Pounds because the market is waiting for US inflation data.
For today's entry review, let's look at the GBPUSD in the following 1 hour chart:
Based on the picture above,
I have determined the following intraday Support and Resistance price levels:
Resistance2 (R2) : 1.2165
Resistance1(R1): 1.2118
Support1 (S1): 1.2030
Support2 (S2): 1.1983
From the chart above, it appears that the price of the GBPUSD pair is still moving lightly and stuck at the daily low, as the basis for the pattern to welcome new sentiment. The market is still in waiting mode.
The basis of the trend will still hold on to the SR level that has been mapped out, by being aware of opportunities for correction or pullback. Stay objective!
Use the Volume type indicator to help us see the strength of the trade in each candle.
The R1 level and the S1 level will also measure how much pressure the trader has today, where this will confirm the direction to go next and also the interest in the transaction.
Beware of consolidation between the R1 level and the S1 level.
Lets see,
Well, in my view/prediction, based on the price movement we analyzed above, today we will try to see the available entry opportunities. However, technicals do not allow assumptions to play, so the best entry that can be made is, we will continue to see the movement of CLOSE PRICE on the 1 hour candle.
My setup for the Breakout opportunity GBPUSD
Buy : If the price of the 1 Hour close candle penetrates the R1 level perfectly (the body candle is far from the upper limit of R1), then get ready to look for the best BUY Entry position, you can also let your position reach the R2 level (the strongest Resistance level today) to see the market reaction to that level to go back up or not.
Sell : If the price of the 1 Hour close candle penetrates the S1 level, then get ready to look for the best SELL Entry position, you can also let your position reach the S2 level (the strongest Support level today) to see the market reaction to that level to go back down or not.
My setup for Pullback opportunity
Sell : If the price of the 1 Hour close candle does not penetrate the R1 level (such as forming a bear pin bar), then prepare to look for the best SELL Entry position, but if the price reaches and breaks this level, prepare to cut loss. Can be applied at level R2 as well.
Buy : If the price of the 1 Hour close candle does not penetrate the S1 level (such as forming a bull pin bar), then be prepared to look for the best BUY Entry position, but if the price reaches and breaks this level, then prepare to cut loss. Can be applied at S2 level as well.
Always use a Risk Reward of at least 1:1 or 1:2 and a trailing stop loss (manual or automatic) when necessary. You can use support and resistance levels for your analysis reference to determine Stop Loss and perform Cut Loss, stay alert for price consolidation.
Continue to use good money management in every entry for the continuation of healthy trading, hopefully this article can be your reference in analyzing the market.