Good day traders!
Lets look at the chart below.
I love looking at charts and finding patterns that I can use to take a trade. At the moment, Pound dollar is trading at 1.571, falling about 200 pips after touching 1.59. Drawing arrows on the chart, it seems that the market is trying to weed out weak longs before it takes the price back up to 1.6 and maybe beyond that.
From the chart above, you can see that there is a cup shape and the drawing is unfinished. The volatility in the pound dollar pair is extremely high with 200 pips ranges. As such, be extremely careful too when you are trading this pair.
The fall in the pair at this moment have been attributed to the better than expected Chicago PMI data. In my opinion, the pair is already technically due for a correction before it heads up again.
I have put in a long trade at 1.571. My Stop loss is 100 pips at 1.561 and I am targeting 1.6 as my Take profit point. Lets see how this trade plays out over time.
Backing the long trade are the moving averages that I use as seen on the charts. I use 21ema, 50ema and 100ema. They are all still indicating a bullish trend.
Anyway, stay tune guys as this trade plays out.
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