Talking Points- GBP/USD Opens to Higher Highs
- Event Risk may Increase Volatility
- Bearish Reversal Signaled Under 1.6329
(Created using FXCM’s Marketscope 2.0 charts)
The GBP/USD continues to be in focus this week, with today’s event risk revolving around the conclusion of the Scottish independence referendum. Running into the London close, the GBP/USD has broken to a higher highs over its R4 camarilla pivot. Price is now trading well above the R4 pivot, with breakout traders first focusing on a 1x extension of the camarilla pivot range to a price of 1.6390. If current momentum trends continue, traders may also select to initiate new buy positions.
As in any trading scenario revolving around the news, price may reverse on increased volatility. A move back under today’s R3 range resistance pivot at 1.6299 would signal a strong change in market conditions. Traders would then look at the possibility of a move back to initial price support at 1.6238 and then a further reversal below final support at 1.6208.
Yesterdays Update
Yesterday, the USD/JPY opened the U.S Trading session testing key values of resistance. During the highly anticipated FOMC news event, price quickly broke above R4 resistance at 107.40. Overnight prices rose even further, with the USD/JPY now trading over 100 pips higher. To learn more, check out yesterday’s FX Reversal article linked below.
---Written by Walker England, Trading Instructor