For Wednesday’s edition of DecaPip Daily, I would like to turn our attention to the GBP/USD currency and the best way for us to trade this pair.
To give a very clear visual snapshot of the current state of play with cable please see the chart below.
We can see it has effectively broken out from the wedge pattern to the downside and it is now in consolidation waiting to either attack the above line or break heavily below the support line at 1.5500 again.
The below chart shows us a triangle pattern in GBP/USD which when clearly broken should provide us finally with a strong move.
The above chart shows us a triangle pattern in GBP/USD which when clearly broken should provide us finally with a strong move.
For me the 5618-37 areas look key to the upside and we would need to see some real momentum and higher time frame closes before entering any buy or sell trades here.
Personally, I would rather swing sell a hold of the triangle top or from a weak looking overshoot than sell a bottom at 1.5500 and likewise if we do close or break the triangle below I would rather keep my options open and look for buyers also .
I have never really been confident in selling lows or buying into highs unless there is a very strong prevailing trend in a currency and it is moving fast. Although breakouts do work they need to be very well timed and the correct approach is waiting to see the higher time frame candle close confirmation under the relevant support or resistance to give us the signal we need to enter the trade.