GBPUSD: Pullback continues for 3rd day after 1.60 missed and top of medium term bearish channel tested
The daily candle chart below shows the short term price history of the Great British Pound (GBP) versus the United States Dollar (USD). This currency pair is known as GBPUSD, and is trading near 1.5684 around time of publication today and lower for the 3rd straight day.
Last time GBPUSD was reviewed in Ideas You Can Trade was earlier this month when the uptrend was testing near 1.56 and resistance was forecast under 1.60. Since then the steep bullish momentum continued but 1.60 was missed on June 18th and 22nd when 1.59 was briefly regained - and the GBPUSD has since returned lower towards current prices.
The pair is also testing the upper-line of a medium term bearish channel and if a bounce doesn't follow from the upper line of the channel then GBPUSD will re-enter the channel and drop further.
If however a bounce from today's low is sustained higher- then the steep bullish trend may be regained or else will change from here on - into a new trend.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.5802 with a Limit to take profit @ 1.5849 and a stop-loss @ 1.5762 Risk/Reward Summary: Limit risk = 47 pips profit / (-40) Stop-loss risk = Gain to Loss ratio = 1.17
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.5648 with a Limit to take profit @ 1.5601 and a stop-loss @ 1.5689 Risk/Reward Summary: Limit risk = 47 pips profit /(-41) Stop-loss risk = Gain to Loss Ratio = 1.14
Daily Candle Chart (medium term view):
Weekly Candle Chart (longer term view):