Trade Of The Day: GBPUSD Resistance Retest

GBPUSD – Momentum fade into overhead supply

GBP was flat yesterday after Wednesday’s acceleration to the upside, as there was no fresh data to guide. Separately, German Chancellor Merkel┬ásaid she will work constructively with the UK on EU reforms but warns that some principles, such as the free movement of┬ápeople, are non-negotiable.

While 1.5380 supports downside reactions expect a grind higher to test 1.56 symmetry objective. Watching for a momentum failure into the 1.56-1.57 zone similar to mid September, whereby intraday price action moves sideways more than straight up as witnessed earlier this week.

Trade Idea

  • I am going to monitor intraday reversal patterns as we test 1.56 symmetry objective. I am expecting supply to emerge between 1.56-1.57, to venture short leaning against 1.58.
  • Will initially play for a correction to the impulse move up this week.
  • Monitor intraday activity towards 1.54 a failure here will suggest the potential for larger reversal as per the chart below.
  • I will also be monitoring FX retail sentiment looking for the market to turn increasingly bullish into resistance zone.

2015-10-16 08_51_27-

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