GBPUSD: Trend turned bearish fast over last two days as pair falls nearly 300 pips putting 1.52 within close reach after bearish channel re-entered
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 1.5351 around time of publication today after falling from 1.5600 in the last 48 hours.
Last time GBPUSD was reviewed in Ideas You Can Trade at the end of June, a pullback was underway after 1.60 was missed, and the upper line of the bearish channel (see point 1 on chart below in white) was tested - and a re-entry into that channel was forecast as precipitating a drop.
Since then the channel was entered and after a brief failed-escape to the uspside of the channel the pair then continued lower and dropped very steeply in the last two sessions. The trend is now more bearish and GBPUSD looks to dive deeper back into the bearish channel -unless a steep recovery follow asap.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.5470 with a Limit to take profit @ 1.5550 and a stop-loss @ 1.5400 Risk/Reward Summary: Limit risk = +80 pips profit / (-70) Stop-loss risk = Gain to Loss ratio = 1.14
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.5335 with a Limit to take profit @ 1.5200 and a stop-loss @ 1.5450 Risk/Reward Summary: Limit risk = +135 pips profit /(-115) Stop-loss risk = Gain to Loss Ratio = 1.17
Daily Candle Chart (medium term view):