GBPUSD breakout long idea (D)

2018년 4월 11일

Hello future me. The GBPUSD have been in a bullish trend since early 2017 and the Cable has steadily been gaining ground against the Greenback. Applying a Schiff Pitchfork, it looks like the market has responded to the medians. Early 2018 we witnessed a brief breakout before price returning to the channels. However, the bulls didn’t stop trying and the market made more attempts before landing where we are today. We are currently, once more, testing the upper median of the Pitchfork.

Looking for support and resistance channels we can begin with drawing a three-touch support starting March 2017, touching August and November same year. Drawing a parallel of this support we can suspect resistance, beginning in February 2017 and touching September same year. During the third resistance touch early 2018 we saw a lot of price action. The resistance moved just above the upper Pitchfork median.

Overlaying Fibonacci retracements starting from the great drop of June 2016 to the current trend bottom of October same year, we notice the market reacting to these retracement levels. Both during the drop and after. The current swing high of 1.43455 was just 7.8 pips shy of the 78.6 retracement (I don't believe in fate) at 1.43533. It looks like the market was attempting to explode through three ceilings made of concrete. The market cleared the upper median with ease, was met with resistance at the upper parallel trend line, and finally didn’t have enough steam to push through the next Fibonacci retracement.

Near term the YTD we look to be in a triangle getting ready to break out to the upside.

The thing that ties this trade together is that we seem to have spawned a new Schiff Pitchfork that the price looks like it’s respecting the new medians. The coming week gives us a plethora of USD weighted news which could push the pair to the upside. It looks like we have a couple of opportunities for long entries. We’re looking for these two main scenarios:

• The market breaks triangle to the upside and the former upper Pitchfork Median.
  
• The market bounces and retraces.
  

If the market breaks out:

• Look for price action conviction in the form of an accelerated move to the upside. The first natural point of resistance is the new Pitchfork median (red solid).
  
• Possible targets could be the 78.6 Fibonacci retracement and further out the upper parallel ascending dotted resistance.
  

If the market bounces, we may see one of the following scenarios:

• The market need to retest the upper boundaries of the triangle before it intersects with the new upper Pitchfork median. If the market breaks the next natural resistance is the 78.6 Fibonacci retracement. If the market doesn’t break with conviction, we’re at risk for price exhaustion.
  
• The market retraces to the lower part of the triangle and finds support at the last Pitchfork median before breaking the triangle. If price action bounces, we have a shot at breaking the triangle to the upside.
  
• The market retraces, and near-term price action doesn’t look like it’ll find support and the market breaks down out of the triangle to the shortside. The next natural support is the lower Pitchfork median, and beyond that trend line support in confluence with 61.8 Fibonacci retracement.
  

As traders we trade probabilities because there are no certainties. In any case, good luck out there and have fun.

2018년 4월 12일

노트

The market is trading at the upper resistance of the triangle. During the day there was an attempt to break out to the upside but has since retraced back to resistance. For a long trade to be valid, the market should break out with conviction. If the market breaks, look in the lower time frames for possible long entries as price retraces back to the triangle (but doesn't break down). We could possibly see a retracement starting at the median (red solid).

2018년 4월 12일

노트

There's some USD news coming out that might nudge the pair lower. If the Cable can resist, or if the Greenback doesn't impress, then the coming storm of GBP news right after that could ignite the pair upwards.

2018년 4월 17일

노트

The market blew past triangle resistance, broke through the pitchfork median, and didn't stop to breathe until it hit the 78.6 retracement and previous high. Tomorrow we're seeing a lot of Cable news, most interesting of which being inflation reports. We may see a pullback and possibly an opportunity to go long.

2018년 4월 22일

주문취소됨

The market didn't find support at the upper resistance of the triangle and instead broke down.