The Great Brexit Pound... Buy or Sell?

Stephen W

I am a Technical Forex Trader & Analyst.

Trading the Forex markets on behalf of Samuel and Co Trading in Watford, I am here to take on the game and prove the naysayers wrong. Come and join my journey as I release my weekly technical analysis and results of last week’s predictions, opening the floor to feedback, open conversation and opinions. I look forward to engaging with you all.

As Q1 comes to a close, I’d like to share with you a pound trade I entered and closed this week along with an update on my USDCAD forecast.

Firstly USDCAD - (source: uk.tradingview.com)

From the daily chart we can see price has started moving in the direction of my initial forecast and (at the time of writing this) moving closer to my ‘profit target 1’ level of 1.346. I’m interested to see how price reacts this level; will we see a double top formation where price rejects and falls back down towards the 0.5 Fib level around 1.33? Or, will we see price break through this resistance level, pullback to re-test the resistance now turned support and continue to head towards my ‘profit target 2’ level of 1.365? I’m intrigued to see how this pans out over the next few weeks and will be sure to keep you posted as always.

GBPCAD 4 Hour chart - (source uk.tradingview.com)

Moving onto my recent GBPCAD trade, since mid-Feb you can see in the chart above that price has been reacting with my ascending trendline - I have highlighted various support areas where price has rejected and continued to rise. As we moved into March, the bullish market started to flatten, and the pair ranged between the 1.744 support level and 1.779 resistance level. With the trendline continuing to support price action, around the 21st March price broke through and pulled back to re-test the underside of the trendline before continuing to fall to the 1.744 support level. At this level, price also found dynamic resistance with the 200EMA and began the next bull run, which caused the pair to break back through the ascending trendline to the upside, only to once again reject the 1.779 resistance level, giving further confirmation of this support and resistance ‘range’ being respected. I’ll now move down into the 1 hour timeframe giving a clearer picture of my entry & exit.

GBPCAD 1 Hour chart - (source uk.tradingview.com)

Looking at the 1 hour chart you can see where my entry was placed along with where I exited. My entry for this trade came after price tried to once again break back through the ascending trendline but struggled with the dynamic resistance of the 200EMA, along with the support of the trendline itself. Once price formed a bullish pin / doji bar and my strategy criteria being met, I placed my long position with a tight stop loss just below the pin bar. Unlucky for me as you can see - my initial profit target was missed by just 3 pips! – This would have been the perfect intraday trade for my style, closing out 3 hours later for 1.4% profit! However, it wasn’t until 24 hours later that price finally headed in my favour again and I manually closed out the trade for 1.4% profit, 30 minutes before Parliament were due to vote on their indicative motion. As you can see from the chart my exit was pretty much bang on, as less than 60 minutes later the market tanked back down towards the 1.744 floor support zone.

Thanks for taking the time to read through today’s article, I look forward to your thoughts and as ever would be great to hear if any of you have also managed to catch some good GBP moves this week?

Disclaimer: Any statements non-factual in nature constitute only current opinions, which are subject to change. The information presented in this article is not a specific buy or sell recommendation and is presented solely for informational purposes only. Not be taken as financial advice.