Dear Daily Price Action Setup Traders
The daily price action setup from last time- namely USD/JPY has been stopped out. The pair opened with a gap after the weekend and cleared my long position. The point of trading is to be able to stay with the winners as long as possible and cut the losers as quick as possible. That is what I am doing and that is what my plan has always been. The DAX price action setup that we had last week is still on and there is no reason to take profits.
As it comes to today’s daily price action setup, it comes from the GBP/USD pair. We are sitting just above the support level of 1.5000. It is a psychological barrier and also a previous low, which means that short-sellers must be careful around those levels. But still if we go blindly with price action, there is a reason to sell. On the daily time frame, we can see a bearish engulfing candlestick pattern. It might be interpreted as a renewed selling interest, but also as a final selling before a bullish correction. I still believe that not so many market participants will decide to go against the trend and start buying. But the number of people that are going to collect their profits around the 1.5000 barrier might be significant.
If you actually decide to short this par, the entry for a short position is at 1.5020. The first target should be 1.4850, which is a multi-year support level. After that level, it depends on price how it is going to perform.