Looking for a short in the area denoted by the purple box. I will be setting my stop just above the high of the wick of the green candle also in the purple box.
We can see that there has previously been a strong price response to this area and price has yet to return to it - this increases the odds in on favour.
We also have the fundamentals in our favour for this trade. The worse than expected CPI data released yesterday has increased the chances of an interest rate cut at the end of the month and in turn this will put downward pressure on the pound.
Although price has recently broken the descending trendline drawn from December 12th on the , price has yet to break the highs seen at the start of the month - therefore the downtrend is still intact which also adds confluence to a short trade.
My profit targets are denoted by each of the blue lines.
As always, this is just an idea and you should undertake your own analysis before undertaking any trades.
I was fortunate with this one as my SL was missed by just 1 pip which allowed me to stay in the trade just before the pound dropped on the poor news release - although this also highlights the importance of good stop placement
The first profit target has also been hit