Live Trade – GBP/USD

Filed under: Live Trades |

 

I currently have a live trade in on the GBP/USD forex currency pair (which is the exchange rate between the British pound and the American dollar). If you begin by looking at Figure 1, you will see all of the relevant support and resistance levels that informed this trade. As you can see, near the bottom of the chart, there is a very important level, and a level that has been respected already of four different occasions over the past few months. This is a level that we need to keep an eye on, and watch out for any price action signals reacting to it.

 

Figure 1.

Figure 1.

If you now look at Figure 2, I will explain why I have put an order in on this pair. The key candlestick is the pin bar highlighted in green. This is a bullish pin bar, and it is perfectly rejecting the aforementioned support/resistance level. Therefore, given that price has also begun to move up, I put an order in to go long at a 50% retracement of the pin bar, with a stop loss placed just a few pips below the low of the pin bar, and a target set of 2.5 times the risk, which also happens to be just before the next short-term support/resistance zone – so it is at a logical level as well.

 

Figure 2.

Figure 2.

My only reservation with this order is that the 8-day exponential moving average is still crossed below the 21-day exponential moving average, and so the long-term trend is still quite bearish. As such, we are going against the long-term trend with this one, but there are signs that this market is becoming more bullish, and we may well be getting in on the beginning of a new trend – with two long bullish candles and a bullish pin bar in the last four days pointing to this.

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