Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.
My bias on the Gbpcad is to the upside, simply because of the signs on the signs that are indicating that the weekly range support might be holding. However, I will examine the lay out my trading plan for both bullish and bearish trading opportunities, should they play out. First, in reference to the weekly chart, the close presents a doji with an extremely long wick to the downside. This closed just above the support of the range, indicating rejection of lower prices due to significant support at the 1.5785 area. The daily timeframe does show an impressive bearish close below this level, but that bar was immediately overshadowed by a bullish one which closed just below the rising trendline, as well as the range support.
Trading Strategy For Longs
Since price is currently trading below the dual resistance of the trendline and range support on the daily chart, I would like to see a bullish close back above 1.5850, to go long towards 1.6000, as a first target. This area has proven to be significant, so I expect strong resistance once there. I would lock in at breakeven at this point, as I look towards the top of the range at 1.6350 for my final target. An option is to also add another target mid-range, at 1.6180. In the event of the above trade setup taking place, the daily trendline and the range support will now provide a convergence of support below which to place my stop loss.
Trading Strategy For Shorts
I did miss an entry to short the pair below 1.5830s for a nice 90-pip move..Oh well.. I have to let it go now and wait for the daily close for further indication of direction. Should the current daily bar close below 1.5700, I will be looking for retracements to short to additional support points on the weekly chart: 1.5600, 1.5350, 1.5150.
Thanks for your continued support 🙂
If you are interested in trading this with me, it is a good idea to follow me on twitter, since I am able to give quick updates there, and you will be able to get them instantly.
When trading always use a stop loss and calculate the proper risk management for your account. This analysis aims at providing assistance to the forex trading community here at Winners Edge Trading, thereby helping them to make informed trading decisions.
Also, if you trade Gbpusd you could find this post from Friday useful, as the levels mentioned are palying out: http://winnersedgetrading.com/technical-analysis-resistance-and-support/
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