GBPUSD → Will We Reject Here!? A Potential Drop to 1.21!
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GBPUSD has made contact with the resistance zone, as predicted from last week's analysis. We're now faced with a decision to short or wait on the sidelines for more price action.
How do we trade this? 🤔
It is not reasonable to short just yet because we do not have a sell signal! We're currently at the resistance level but without a confirmation of rejection, there is no justification to short without imposing too much risk. Enter after another sell signal, then 1:2 risk ratio down to the bottom of the trading range around 1.22000.
If the price breaks resistance, wait for it to confirm support on the resistance zone then look for a long entry off of a bull signal and confirmation bar.
💡 Trade Idea 💡
Short Entry: 1.26670
🟥 Stop Loss: 1.29000
✅ Take Profit: 1.22000
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Trading Range after Bull Run, Bias to Long.
2. Price Currently at Resistance Zone, Look for a Reversal Signal.
3. If Shorting, Watch the 200EMA for Support.
4. If Break Resistance, wait for New Support Confirmation.
5. RSI near 70.00, Bias to Short.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
How do we trade this? 🤔
It is not reasonable to short just yet because we do not have a sell signal! We're currently at the resistance level but without a confirmation of rejection, there is no justification to short without imposing too much risk. Enter after another sell signal, then 1:2 risk ratio down to the bottom of the trading range around 1.22000.
If the price breaks resistance, wait for it to confirm support on the resistance zone then look for a long entry off of a bull signal and confirmation bar.
💡 Trade Idea 💡
Short Entry: 1.26670
🟥 Stop Loss: 1.29000
✅ Take Profit: 1.22000
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Trading Range after Bull Run, Bias to Long.
2. Price Currently at Resistance Zone, Look for a Reversal Signal.
3. If Shorting, Watch the 200EMA for Support.
4. If Break Resistance, wait for New Support Confirmation.
5. RSI near 70.00, Bias to Short.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
Nota
So far so good for the short setup! This Daily candle needs to close on or near its low to justify a short. One more bear candle to confirm would be optimal probability. More updates as developments form!Nota
Double top on the 4HR Chart, two Daily candles closing near their lows below resistance. The short position is now justified. Aim for a protective stop just above the resistance zone at a 1:2 Risk/Reward toward the bottom of the channel. Keep an eye on the 30 and 200 EMA ribbons for support.Remember, this is a trading range after a bull channel, so the bias ought to be bullish. It's reasonable to scalp half the position of the short at 1:1 Risk/Reward and take the remainder of profits toward the bottom of the channel or when a reversal bar to the upside appears.
More updates to come as they unfold!
-Joe Dean
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