GBPUSD Potential Blast Off or Sell Off
There are a few ways to view the current market conditions of the the GBPUSD.
The Pivot Stack shows us the bias is bearish. You'll notice the flattening DPMA 14 Day which could rollover and cross the DPMA 30 Day, a bearish signal. Hence, we will want to place an entry stop order on the breakdown of the support level to go short. This will allow a confirmation of the move down and a more conservative way to enter the short side.
Secondly, you could enter the market long right here at about 1.3040 and place a close stop loss just under the support level of 1.2997. In addition, you could place a reversal stop loss order at this same level to exit your long and then go short. Your risk is 40 pips with good potential to the upside or downside depending on how it plays out.
Important to understand:
The new MPR was released today as you can see, the price is sitting right on top of the MPR range and pivot. The MPR is very narrow: 1.3043 / 1.3042, which is rare to be so tight, and this is long term support/resistance, which means it is more significant as support or resistance than the shorter term indicators.
Either direction this decides to go, the move will likely be swift with strong momentum. The price tends to move fast off this type of support/resistance levels (MPR), and why I call it a blast off launching pad scenario.
In this particular setup we have all other pivots above the current MPR levels, which means the near term bias is bearish. But with the price right in the middle MPR, we don’t really know which direction this will go until it breaks out/off of the MPR level.
If the price decides to take off to the upside it could easily ignore all other pivot resistance levels and move like a rocket. If this occurs, keep an eye on the top of the Pivot Stack, around 1.3117 as this is near the high of the previous session and the high of the 6 Day RPR...it’s a key resistance level where the price could fail to move above.
But again, I would bet on the price rallying through this level on a blast off trade (aka Justice trade). Watch the momentum and speed that the price moves. This would be an important factor in determining whether or not to add to the long position. If you get long, look to add to the position just above the resistance, maybe 1.3120, to pyramid your position.
Happy Trading
*See the Legend below for the Indicator Guide*
IF YOU THINK THIS STUDY HAS VALUE, PLEASE FOLLOW ME AND LIKE THE CHART.
Thank you for your support – I look forward showing you many more studies like this that can help you with your trading.
Indicator Legend:
Daily Pivot Range-DPR (blue/magenta dots) | Weekly Pivot Range-WPR (orange/red dots) | Monthly Pivot Range-MPR (green/black dots)
6 Day Rolling Pivot Range-RPR (lime/yellow dots)
Daily Pivot Moving Averages-DPMA: red=14 day, yellow=30 day, white=50 day
The Pivot Stack shows us the bias is bearish. You'll notice the flattening DPMA 14 Day which could rollover and cross the DPMA 30 Day, a bearish signal. Hence, we will want to place an entry stop order on the breakdown of the support level to go short. This will allow a confirmation of the move down and a more conservative way to enter the short side.
Secondly, you could enter the market long right here at about 1.3040 and place a close stop loss just under the support level of 1.2997. In addition, you could place a reversal stop loss order at this same level to exit your long and then go short. Your risk is 40 pips with good potential to the upside or downside depending on how it plays out.
Important to understand:
The new MPR was released today as you can see, the price is sitting right on top of the MPR range and pivot. The MPR is very narrow: 1.3043 / 1.3042, which is rare to be so tight, and this is long term support/resistance, which means it is more significant as support or resistance than the shorter term indicators.
Either direction this decides to go, the move will likely be swift with strong momentum. The price tends to move fast off this type of support/resistance levels (MPR), and why I call it a blast off launching pad scenario.
In this particular setup we have all other pivots above the current MPR levels, which means the near term bias is bearish. But with the price right in the middle MPR, we don’t really know which direction this will go until it breaks out/off of the MPR level.
If the price decides to take off to the upside it could easily ignore all other pivot resistance levels and move like a rocket. If this occurs, keep an eye on the top of the Pivot Stack, around 1.3117 as this is near the high of the previous session and the high of the 6 Day RPR...it’s a key resistance level where the price could fail to move above.
But again, I would bet on the price rallying through this level on a blast off trade (aka Justice trade). Watch the momentum and speed that the price moves. This would be an important factor in determining whether or not to add to the long position. If you get long, look to add to the position just above the resistance, maybe 1.3120, to pyramid your position.
Happy Trading
*See the Legend below for the Indicator Guide*
IF YOU THINK THIS STUDY HAS VALUE, PLEASE FOLLOW ME AND LIKE THE CHART.
Thank you for your support – I look forward showing you many more studies like this that can help you with your trading.
Indicator Legend:
Daily Pivot Range-DPR (blue/magenta dots) | Weekly Pivot Range-WPR (orange/red dots) | Monthly Pivot Range-MPR (green/black dots)
6 Day Rolling Pivot Range-RPR (lime/yellow dots)
Daily Pivot Moving Averages-DPMA: red=14 day, yellow=30 day, white=50 day
Comment:
The market did not move swiftly as I suggested it might. Doesn't matter now. I am currently short the market with the breakdown move that occurred below the support line. With today's rally I will trail my stop loss to just above the 6 Day RPR high to 1.3127
