The GBP made 2015 highs last week in the 1.5550 area. Last Thursday sellers emerged and we saw strong profit taking and a very bearish reversal.
Today we saw a familiar setup of lower highs continuing and a nice reversal in advance of the US Open. A short is taken with a tight 15 pip stop loss and the event risk being the ADP Non-Farm Employment Change. A quick move up on the release came shy of moving above yesterday’s low and the downtrend continued. We tighten our stop loss to plus one pip and subsequently lower as price moved toward our targets. As price is more likely to retrace after Target 2… we tighten our take profit and the market takes us out.
Price continued lower without us but bounced at a very important level on the 4 hour chart. If this level gives way, price has room to move and test the 1.5000 Big Figure. The remainder of the week has a lot of event risk culminating with Non-Farm Employment Change on Friday. Be very careful trading and keep your stops tight.
Good luck with your trading!
Back tomorrow if we find a trade.