Daily Price Action
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Price Action Setups: GBPUSD, GBPCHF and EURGBP

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Fairly quiet day across the market. As a result many pairs formed inside bars after putting in aggressive moves late last week. Therefore I think it’s only fitting that we take a look at a few of those inside bars to see if any are worthy trade setups.

The first setup I want to discuss is GBPUSD. The Pound has come under severe pressure ever since mid July when it began forming the recent top. The subsequent break of trend line support on July 30th only added to the pressure.

Last Friday we saw the market break down even further and close below key support at 1.682. As we typically see after an aggressive move like this the pair formed a bearish inside bar today.

Although the formation of the inside bar is exactly what we want to see, the risk to reward ratio isn’t as favorable at just 1.5R. And that’s with a stop loss above the inside bar, which is a more aggressive style of trading inside bars.

Summary: Although I like today’s inside bar from a technical standpoint, I would prefer to see a retrace to the 1.682 resistance level with bearish price action as a sell signal. This would provide a much better risk to reward ratio. The next key support comes in at 1.67.

gbpusd daily forex chart

Similar to GBPUSD, GBPCHF also put in a bearish inside bar today. Unfortunately, in similar fashion to the GBPUSD inside bar, today’s setup doesn’t provide us with a very favorable risk to reward ratio with support at 1.5115.

However I am watching current levels on the 4 hour chart to see how the market reacts. A bearish pin bar here could provide us with a nice setup.

Summary: Watching the 1.522 area for bearish price action. The next key support appears to comes in between 1.5115 and 1.5135.

gbpchf daily forex chart

EURGBP analysis

eurgbp daily forex chart

 

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