GBPUSD had a strong bearish day yesterday. The price was on an uptrend by obeying an up trending trend line. That trend line got broken by an H4 bearish candle. Moreover, the price has started having a correction as well. This means the pair might have another bearish day today. There is a level which has the potential to be the level of resistance. If the level is held and it produces an H4 bearish engulfing candle, then an H1 breakout at yesterday’s lower low would drive the price further down.
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The level of 1.31290 has to be held and produce an H4 bearish engulfing candle. After wards, an H1 breakout at the level of 1.30540 would be the signal for the sellers to go short on the pair and grab some green pips.
Let us have a look at the summary of the trade
- Sell Stop Order: 1.30540
- Stop Loss: 1.31290
- Take Profit: 1.28300
Today the USD has a very high impact news event at GMT 19.00. ‘FOMC statement’ and ‘Federal Fund Rate’ are going to have huge impact on the USD. I assume today’s signal would come 6/7 hours earlier than the news schedule. Then, it would be alright to take the entry. If it takes too long to come or comes just an hour before, then we must not take the entry. Today’s news events might produce long spikes and sweep away stop losses based on smaller time frames. Traders should be more careful today with the USD pairs.
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