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Selling the GBP/USD Around 1.52

Let's cut to the chase here. Last week's US NFP report helped the USD gain across the board. GBP/USD was dragged below 1.52 But in the daily chart, we can see that it was already in a bearish continuation mode ahead of the NFP. 

GBP/USD Daily Chat 3/9
(click to enlarge)

We can see that in February, there was a significant bullish correction from 1.4950 (January, and 2015-low) to 1.5550. This rally broke above a falling trendline and the 50-day SMA while pushing the RSI above 60. So, we did lose the bearish bias and momentum. However, price did respect the 100-day SMA and a previous consolidation support area, which showed the the bulls overstayed their welcome in this market. When price fell back below the 50-day SMA and below the support/resistance pivot around 1.52, bears were back in the picture.

After the NFP, we are looking at a bearish outlook at least towards the 1.4950 low. It is stalling at the momentum just above 1.50, and if there is a rally back towards 1.52, we should look at it as an opportunity for more sellers to get in.

GBP/USD 4H Chart 3/9
(click to enlarge)

Around 1.52, we have a falling trendline, and if the RSI also approaches 60 in the 4H chart, we can expect a bearish continuation attempt. Let's say we put a stop at 1.5275 which would clear not only the falling speedline, but also the 50-period SMA and a previous consolidation resistance, the risk would be 75 pips for an entry at 1.52. Meanwhile, the potential reward for a target of 1.50, and 1.4950 would be 200 pips and 250 pips respectively.

With the bearish outlook more likely than the bullish correction outlook and with a satisfactory reward to risk for a sell at 1.52, we should keep the GBP/USD on our radar this week.