GBPUSD: Failed Support Pushing Pound To 15 Month Low in DownTrend
The daily candle chart below shows the 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 1.5550 around time of publication today.
Last time GBPUSD was reviewed in Ideas You Can Trade, the upper resistance line of a bearish channel had been reached and since then reversed lower causing the pair to continue its descent. Today GBPUSD hit a fresh 15 month low and this area doesn't appear to have much support, indicating that a lower low could follow.
From a much longer term chart however, using monthly candles, support could exist near current levels, as seen below in the additional chart. For now the trend still seems bearish as multiple bearish resistance lines remain above current prices (see additional daily chart below) which could curtail a recovery.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.5593 with a Limit to take profit @ 1.5638 and a stop-loss @ 1.5559 Risk/Reward Summary: Limit risk = +45 pips profit / (-34) Stop-loss risk = Gain to Loss ratio = 1.32
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.5499 with a Limit to take profit @ 1.5477 and a stop-loss @ 1.5521 Risk/Reward Summary: Limit risk = +22 pips profit /(-22) Stop-loss risk = Gain to Loss Ratio = 1.00
Daily Candle Chart:
Daily Candle Chart different view:
Very Long-Term Chart MONTHLY candles: