GBPUSD took a Bullish move on the H4 chart. The pair seems to have found a level of Resistance. The price pattern suggests that we might get a Double Top at that level. If that happens, then a breakout towards the downside would offer us a short entry. Let us have a look at the H4 GBPUSD chart.
GBPUSD Price Action Analysis – 5th Nov 2018
The level that we have marked as the Resistance level, the price had reacted to this level heavily earlier. This means it is a significant level, which has the potential to be a strong level of Support or Resistance. Today’s price action suggests that the pair is producing a strong H4 Bearish candle right at that level. If the price continues to go Bearish from here and makes a breakout at the level of 1.29485, then the price would head towards the level of 1.27000. Summary of the trade…
- Sell Stop Order: 1. 29485
- Stop loss: 1.30215
- Take Profit: 1. 27000
- Validity: 72 hours
- Whenever possible, move the stop loss to the entry price and whenever you want, you can take profit anytime as long as you feel comfortable
The GBP has a high impact news event called “Services PMI” at GMT 09.30. The USD has a high impact news event called “ISM Non-Manufacturing PMI” at GMT 15.00. I assume that the GBP news event would create volatility. The breakout might take place after the GBP news event. If we get the breakout after the GBP news event, we might as well take the entry according to this trade setup. We do not have to worry about the US news event since it is an H4 chart trade setup.
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