I can hear people screaming “SELL, SELL” at the moment and they’d be right but the question is WHY ?
On the daily chart, it’s only too clear PRICE has hit a wall at the confluence of the 100/200EMAs, the 23% FIB from the March 2020 lows, the upper channel of the regression channel (RC) and within spitting distance of touching the upper resistance band in green . . . look to the left at all those hits !!
Algos and humans alike are bound to be taking a little profit at these levels but it doesn’t mean it’s going to continue down to hit a new low beneath 1.32. If you’re a fundamental news trader, then you might be forgiven for thinking the UK economy is in dire straights and you may be correct but the UK also has rampant inflation and one could argue that they cancel each other out in terms of the £/$.
Drilling down to the 60m chart it was “game on” for a SELL at 4am GMT with the 100/200 MACD Histogram in the RED and the 10/crossed the 20 EMA (10MACD below zero) and you could have banked 35 points for an intraday trade before breakfast. Using the 15m as an entry time frame, it’s even more obvious where the opportunity was. There are numerous trade opportunities every day on all markets and I’ve marked out just a few of the BUY opportunities on the GBP/USD in blue (I’ve not even taken the maximum of points available as this method of trading cannot predict when a move will end and TPs are always up to the individual.
At the moment there is no BUY or SELL signal but as PRICE will often return to the 10/20EMAs on any move, then there is a possibility PRICE will continue downward during the day to 1.348 region as there’s an NPOC there and it’s close to major support levels. I can’t predict where PRICE will go and no-one can . . . but in simple terms (10>20)>(40>80) on the 15m then look to BUY and conversely look to SELL. Keep it simple and don’t over think it.
TS
PS. I'm always neutral until I'm not :)
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