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GBPUSD: Keep an Eye on 1.3860 Next Week

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Important: I use New York close charts. Click Here to Use My Preferred Broker

This week’s GBPUSD weakness worked out nicely for us. Monday’s retest of descending channel resistance at 1.4070 presented a favorable opportunity to get short.

I entered at 1.4058 and added to the position following Tuesday’s close below ascending channel support at 1.3905.

I decided to close my entire short position during the second half of yesterday’s session at 1.3750. I viewed today’s speeches by the BOE’s Governor Carney and Prime Minister May as possible disruptors to the downward momentum.

However, I am interested in getting back in as I’m not convinced that the retracement that began in late January has run its course. My original target here was 1.3600, which has yet to come under fire as new support.

As such, I’m keeping the 1.3860 area on my radar for next week. The level served as support in early February and more recently on the 22nd and 27th.

It’s also the 23.6% Fibonacci retracement from the January 25 high to yesterday’s low, and very near the 38.2% retracement of this week’s range.

There’s no guarantee the pair will get back to 1.3860 next week before retesting the 1.3600 handle. If it doesn’t, that’s okay. I made a good bit of money from this week’s move, and there are always opportunities developing elsewhere.

I also don’t want to chase because although the GBPUSD is near its weekly mean, the daily time frame is currently trading 120 pips below the 10 and 20 EMAs. That alone suggests we could see the pair drift sideways a while longer before the next push lower.

In summary, I’m going to keep a close eye on 1.3860 next week. As long as this level holds on a daily closing basis (using New York close charts), the 1.3600 level remains exposed. A close above 1.3860 would set our sights on descending channel resistance near 1.3950.

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GBPUSD possible selling opportunity on the daily chart

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18 comments
Vuyisile says

I have been following your update with regards to this pair and I took advantage of the Tuesday’s close below ascending channel support as per your analysis. Thank
I don’t know if I would be asking much but I ask anyway. I have my trendline on USDCAD wand resistance line at 1.29168(Current Tested Price) on Daily time frame. Is advisable to enter short or wait for a close above/below the resistance?

Your response will be highly appreciated. Thank you!

Reply
    Justin Bennett says

    Sorry, I don’t advise people on what they should do with their capital.

    Reply
    andrea says

    Vuyisile
    I’b be very careful. There is an Andrew’s pitchfork in action and though that resistance you are talking about is very effective (50% fibo) the price has not reached the central fork yet so could go both ways

    Reply
Pierre+Mifsud says

I perfectly agree with you because on the 2 hr RSI chart I spotted a bullish divergence possibly resulting in reaching the resistance zone of 1.39153. This bullish divergence has emerged between the period 27 th February till 2nd March 2018. Have a look at it when you have the chance and get back to me….

Reply
    Ade says

    We deal with D1 and H4 chart only.

    Reply
      Pierre+Mifsud says

      Yes but if the 4 hr charts and 1 D charts are at times messy do you have any other option? Best is to try them all,no, so that you can utilize the best options!

      Reply
        Hosea says

        not really. the strategy discussed here requires the larger time frames to confirm entry. read about Justins strategies i.e. the Pin bar / trend line breakout startegies on this site to understand better why you have to use the daily or H4 charts

        Reply
        ade says

        best to learn D1 and H4. before looking at lower time frame. lower time frame is better to look at once you can make consistent money on the higher timeframes.

        https://dailypriceaction.com/friday-qna/4-hour-or-daily-time-frame

        Reply
Kit Villeta says

@Justin 🙂
Thank you so much for all the info. Keep it up. More pips to come. Thank You…I wish you the best. 🙂

Reply
heshmat says

hi.thanks for update.
The amount of the $ 297 membership fee is for how long ?

Reply
    Justin Bennett says

    It’s a one-time payment for a lifetime membership.

    Reply
Obeid Kimilike says

I’m very near to the business, but it looks so lucrative.

Reply
Obeid Kimili says

New not near

Reply
lameck malimi says

Very very nice job.keep it up.

Reply
Nauman Anwar says

What is the benefits of life time membership? Email me details.

Reply
sonate says

Thanks you are right

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sreekumar says

closed below 1.3860

Reply
sameh says

today gbp rose above the trend line? what do you think of the pair now?

Reply
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