Welcome to our newest feature; DecaPip. The concept is simple: our professional market technician, with an exceptional system, showcases his own daily Support and Resistance levels across a broad spectrum of FX currency pairs. The most effective way to use the levels are:
- If indicated levels hold, look for the price to reverse.
- If levels are broken, look for the price to continue past to new highs or lows.
For Wednesday’s DecaPip Daily feature I would like to look at the recent trading activity in GBPUSD and how we can potentially trade this pair going forward in the near term.
Yesterday we saw a heavy move to the upside on better than expected UK CPI figures which saw the pair reach 1.5718 before a lackluster retrace down to the 1.5650 level.This has left the pair still without a meaningful close above the 1.5700 on a daily basis and we therefore find ourselves still with the 1.5500-1.5700 range.
The below chart highlights how GBPUSD has been stuck in this 200 pip range for nearly 1 month of trading.
The chart below shows us a more intraday perspective and the key levels that GBPUSD traders will be looking for today.
We can see from the above chart that a break below 1.5660 exposes the 1.5620 area support and also 1.5580 may come into focus as a more meaningful support level should the break have some follow through with sellers.
Currently for me the best way to trade this pair is to swing short the 1.5730-47 area with a mindset that we will continue to see the range bound activity in GBPUSD until the September Federal Reserve interest rate decision.
Alternatively another plan I have is to wait until we reach the bottom of the box located at 1.5480-1.500 and initiate a buy position.
Essentially in trading this is called “playing the range” which it my current strategy albeit from very well clearly defined levels.
Got any questions about our new DecaPip feature? Contact Nathan at Nathan@littlefishfx.com
All comments, charts and analysis on this website are purely provided to demonstrate our own personal thoughts and views of the market and should in no way be treated as recommendations or advice. Please do not trade based solely on any information provided within this site, always do your own analysis. For more information please see our full disclaimer in the footer below.