GBPUSD
Has been consolidating within a tight range for the last few hours and is setting up a potential Bearish Gartley pattern within that range. If the pattern should complete then I would be looking for a selling opportunity back into the lower support lines of the channel/range.
If the pattern does complete, I would be looking for an entry condition within my kill zone - the red rectangle (double top, double top followed by a lower low lower close candle)
Alternatively, as harmonic patterns are said to be highly successful (I've heard, still back testing but forward testing has been quite promising), aggressive entry at completion or slightly lower is another entry option. I'm highly partial to conservative wait for confirmation approaches at the moment so...
Not withstanding, I have gone with an aggressive entry approach on this chart to see how that plays out. Reward-Risk here is 1:1. There's UK Construction PMI data out at 9:30 am and US ADP Non-Farms Employment Change at 13:15 pm (UK times) - apparently a precursor to the all mighty Non-Farms due this Friday 4th so be careful in all your USD and GBP trades today.
I think Cable has done exceptionally well over the past month for the bulls, and while I remain bullish to completion of the Inverse Head and Shoulders at measured target (not drawn out here), I think cable is due a breather of some sort. This might be the setup for that breather.
Trade closed manually:
Bowed out gracefully on this pair for a minor profit (demo).
Price action is establishing a higher low at structure, and while I have not been stopped out and there remains a "possibility" of some continued downward momentum, in light of the results of ADP Non-Farms Employment Change data, as well as the negative correlation between GBPUSD and FTSE 100/UKX, I am not as confident about the continued outcome of my previous analysis.
Protect capital. There is always tomorrow.
Price action is establishing a higher low at structure, and while I have not been stopped out and there remains a "possibility" of some continued downward momentum, in light of the results of ADP Non-Farms Employment Change data, as well as the negative correlation between GBPUSD and FTSE 100/UKX, I am not as confident about the continued outcome of my previous analysis.
Protect capital. There is always tomorrow.
Having found support at previous lows, this action has changed the formation of the harmonic pattern from a Bearish Gartley to a Bearish Cypher.
I remain short the pair, with stops unchanged and slightly lower entry, but also lower targets. Still a good reward to risk ratio, which has improved a tad.