GBPUSD SKA CAPITAL Looking short on this pair, firstly looking at an upside move to potential levels 1.31650-1.31850 (Trend line bounce).From this level we would await key bearish PA to develop; we would then seek entry to downside targets of 1.3070 then our ideal target 1.29750. The ideal target would be valid on the basis of a bearish breakout below 1.30750. Our management target being 1.3070.
We harve a possible bullish harmonic pattern in play which provides us with the confluence of an upside move from current support. As you could see we have further confluence with Senkou Span A (Green Cloud) acting as Resistance. We then have a Kumo Down Twist forming and price being below the clouds and the 200 EMA demontrates bearish momentum and a possible continuation to the downside. We have lower highs which is demonstrated in the defending channel.
Furthermore, we can possibly see a bearish ABCD formation to our downside targets.
TRADE SETUP
We would wait for price to reach the trend line and target of the Harmonic pattern before looking for the short (sell) trade setup, you can set up a sell limit order however we prefer to wait to setup a sell stop order to endure we enter on the basis of bearish PA. (Shorter term traders can look to buy to levels 1.31550).
As you could see our stops are placed at 1.32300, stops could also be placed at 1.3300. However, we would prefer to have our stops just above the Senkou Span A & B and above the trend line as a break above would demonstrate further bullish momentum.
Therefore a possible strong setup would be as follows:
SELL STOP/LIMIT ORDER: 1.31550
TAKE PROFIT (Management): 1.30850
TAKE PROFIT (Ideal): 1.29750
STOP LOSS (ideal): 1.3200
STOP LOSS (Possible) 1.3300
***TRADE AT OWN RISK***
