GBPUSD: Key Support Zone In Play But No Long Trigger. Yet.

OANDA:GBPUSD   British Pound / U.S. Dollar
GBPUSD update: A strong dollar move pushes this pair into an attractive support level as price attempts to find some stability. If it can trigger a long, it will be very important to be proactive when it comes to position management.

The key level here is the 1.3551 which is the reversal zone boundary relative to the 1.3712 range low. This means price is within the reversal zone but has not generated a long signal. Bearish momentum and some fundamental variables weigh against this market, but that does not mean it can't retrace before going lower.

The most likely target for a long from an area like this is the 1.3887 level (.382 of current bearish swing). Since so much is working against this market, I would use an even more conservative target if a long is triggered just to increase the chances of a successful exit.

Overall this market is testing the low of a broad range. What is important to consider is that the long term Elliott Wave count is bearish which means holding onto longs is not favorable. Taking a trade against the bigger picture does carry more risk, but for swing trading purposes, if the short term probability favors a move that is worth more than 100 pips, I would be willing to take the risk. If a trade is triggered, it will be highlighted on S.C. only. As of right now, we are still neutral on this market.

Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)


What do you mean by "1.3551 is relative to 1.3712 range low". Why are they relative?
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