My last post i went on to explain the importance of knowing what is happening with the dollar against trading it against other pairs.
Here with GBPUSD you can see the pair was very bearish for some time and during that time DXY was pushing up as the dollar was getting stronger. So when i was looking at this pair over the weekend i identified this purple zone of interest where price has previously rejected and again recently pushed price down.
This allowed me to add a fib in place from the recent swing low to the recent high in that purple zone. Now originally i wanted price to pull back into the 61.80% where we can see we have had previous price action but instead it fell just short of this before we could see a turn in price. I dropped onto the 1hr chart and could see a strong bullish push so i waited for confirmation on the hour closure and from that i looked back at DXY and found that price on DXY had also reached my interesting zone where price may slow and the dollar should become weaker for a short period of time.
To summarise, Daily time frame shows bullish, 4hr we can include our fin as confluence, along with the DXY chart showing a slowing of dollar so we have a good 3 confluences for this trade. Let's wait and see.
I dont understand - when GB inflation rate rise (15.09 Core Inflation Rate YoY (AUG) Actual:3.1%)
- why GBPUSD price was rised?
Forexforbeginners
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@jimmyhu72, I get why it may seem like it will go the opposite way. Remember a lot of the time when high impact news hits you'll see fluctuation in price for a short time and then when things settle the market goes back to normal.
As I was basing this trade a lot off what the DXY was doing I could see that we had reached an interest zone where the dollar should also weaken so that was my main bias on the setup. I RARELY trade news or let it mask my opinion on the charts to be honest.
- why GBPUSD price was rised?