Dear Daily Price Action Setup Traders,
The trading idea from yesterday (GBP/CAD), managed to act according to plan. Although, it did meet the imminent resistance, that was not a reason for the pair to not go 200 pips in our favor before closing the day 100 pips up. The direction of this pair is still in line with the general trend. Therefore, there is no reason to close open positions.
Today’s trading idea is coming from another Pound pair- namely GBP/USD. It was an interesting trading session. We had a nice move up in the morning, followed by some profit taking around US open and then new buyers pushing up the price to an equilibrium state at 1.5747, where this pair did close. From a daily price action setup point of view, I am seeing a bullish formation. There is a bullish engulfing pattern, that has formed just above the major support level. The next trading session is going to be wild. There is the UK unemployment data in the morning and then the FOMC meeting. Both of those fundamental releases would give extreme volatility to the markets and especially this pair. Therefore, traders should be careful about this pair.
At the same time, according to price action only, there is a great opportunity for a long entry. For me a good entry point is the level of 1.5700 with a stop loss just under 1.5590. The first target should be 1.5900 and then possibly 1.6000.