GBPUSD – retesting the 200dma from below .. the week of 09 DecAfter being in bullish territory (above the 200dma) for over 6 months, this pair has broken below and on Fri, it retested (bounced off) the moving average. That is my reason #1 for a bearish bias.
#2 – The area around 1.2750 is a significant s/r & price has met with resistance here.
#3 – The bullish move we saw over the last 2 weeks was a retracement of the down move that began on 06 Nov.
#4 – This retracement of 50% coincides with the 1.2750 s/r level.
#5 – The weekly and daily chart are in complete alignment with this analysis.
#6 – The H4 chart shows how price has been moving in an equidistant channel during the retracement phase. Like most retracements, this move has been weak and shallow.
I believe that price will break out of this channel to the downside and the bearish move will soon continue. If this happens, price will also move below the 20sma. This will complete the picture I want to see for bearish price action.
I will place my stop above today’s daily pin bar and will initially target the 1.2340 region. My expectation is that this has the potential to be a prolonged bearish trend.
This is not a trade recommendation, merely my own analysis. If you decide to trade this, you should be aware that trading carries a high level of risk, so only trade with money you can afford to lose. Please use sound money and risk management, trading without a stop or moving the stop away from price is a recipe for disaster.
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It’s not whether you are right or wrong, but how much money you make when you are right and how much you lose when you are wrong – George Soros
