Live Trade – GBP/USD (unfilled order)

Filed under: Live Trades |

 

I currently have an order in on the GBP/USD forex currency pair (the pair for the British pound and the United States dollar), and I would like to talk you through this setup right now.

 

Figure 1.

Figure 1.

To begin with, take a look at Figure 1. This is the weekly chart for the GBP/USD pair. What this shows us is that there is a very nice area of support/resistance at the top of this chart that has already been firmly respected on two previous occasions. Price is once again approaching this area, so it is interesting to see if there will be any reaction at this area in the form of a price action signal.

 

Figure 2,

Figure 2,

Figure 2 shows the daily chart for the same GBP/USD pair. What we can see here is that a price action signal did indeed form at this level in the form of a massive pin bar, rejecting the level of support/resistance. Now, I am very wary of going against any daily momentum and trends, and with the 8-day EMA crossed well above the 21-day EMA, this was one of those occasions. However, as this level of support/resistance is so important, and as the pin bar was so well deformed at this area, I felt that the setup warranted an order being placed, with a stop loss just above the high of the move, and a target of two times the risk. This may well prove to be a mistake to go against this kind of momentum, but occasionally, a setup forms that you just cannot leave alone. Hopefully, the order will be filled and the level of support/resistance will hold firm. If it doesn’t, then our bank will take a 1% hit. If it does, then we will have a 2% gain on the bank. Let’s hope it is the latter…

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