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GBPUSD: Bearish Engulfing Day Exposes Downside Targets

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Over the weekend we looked at the GBPUSD and how prices have held below the 1.2775 area on a daily closing basis since dropping below it on June 9th. But until yesterday’s session there hadn’t been a valid sell signal.

Buyers kicked off the new week with a 60 pip rally but quickly lost their grip after reaching a session high of 1.2813. The sudden shift in direction carved out a bearish engulfing pattern on the daily time frame.

I will say, however, that the task of engulfing Friday’s range wasn’t exactly a tall order. After all, Friday was limited to just 55 pips from the low to the high.

Nonetheless, yesterday’s bearish pattern does suggest that sellers are in control. It also exposes two levels I mentioned over the weekend at 1.2655 and 1.2560.

Because prices remain approximately 60 pips below the mean as measured by the 10 and 20 EMAs, we could see a rotation back toward 1.2775 before a move lower. To be thorough, I’m putting that resistance area between 1.2750 and 1.2775.

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GBPUSD daily chart

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6 comments
D.BABU NARAYANAN says

DEAR SIR what does the word MEAN means pl explain
(Because prices remain approximately 60 pips below the mean as measured by the 10 and 20 EMAs,)

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Bani says

Thank u so much for help

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    Justin Bennett says

    You’re welcome.

    Reply
Mohd Hasyim Che Mat says

good trade for gu..your pin bar

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