atrader
Short

Overbought GBPUSD? Three advancing blocks

FX:GBPUSD   British Pound/U.S. Dollar
229 3 0
Whilst the Moving Averages and current trends direction is bullish , we can ask ourselves if this could be a turning point for GBPUSD             . Chances are it wont and new highs are to be made. However the three advancing blocks (3 weak white soldiers of last 3 candlesticks) combined with the Elliot wave theory (marking the trend as a possible last wave 5) and the overbought RSI (nearing 70) may give a reason to short.
The last daily bar has a small volatility and the signal for shorting is below its lows at around 1.7130.
Such a trade is against the trend (ie against directions probabilities) hence tightening the stoploss upon a movement down is to be considered.
What makes such a trade attractive is the perceived Reward-Risk ratio.
Just an idea.
atrader
2 years ago
7/7/14: The daily candlesticks of Thursday and Friday (hanging man and doji) showed the three advancing blocks have indicated a slowing uptrend. However it is still a possibility to see new highs as GBPUSD hasnt dropped a lot showing buyers were in control. Lets see if sellers shall gain more control this week.
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atrader
2 years ago
24/7/14: The price is now approaching an area of support, being at the same price region of highs of larger wave 3 and the lows of smaller wave 4. A daily close below the wave 4 low gives an added probability on the price eventually reaching the target. The stoploss however would have been triggered if it was based on the intrabar move but not triggered if based on the end of day move. Probably a better point to have placed it is slightly above the 1.72 price in order to avoid the whipsaw price action which made a new high in the form of a false breakout.
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atrader
2 years ago
6/8/14: What is next: the down move clearly showed that GBPUSD was indeed overbought above the 1.70 levels. The upward momentum is still there so I would expect GBPUSD to climb a bit upwards to a retrace of 50% of its last downmove from 1.7180. However new lows may be made which shall alter the 50% retracement point.
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