Pound pairs have gapped lower off of Friday’s high. May have something to do with the headline in The Sunday Times ‘Tory turmoil as 40 MPs say May must go’. When trading gaps, we wait for the gap to fill and then continue trading in the original direction. I have not included GBPJPY in the below technical analysis as I am a bull on Yen pairs in Q4. I have included GBPCHF though keep in mind – if we get the weakness in the Yen that we are expecting, CHF could also weaken due to risk on trade (safe havens are weak in risk-on markets) so therefore you may choose to rather not sell GBPCHF as a weak GBP and weak CHF makes for a sideways GBPCHF. Remember that all the Pound pairs came off MM3 at the start of the month and so therefore if you are a Bear this could be your second entry on the monthly bearish swing and therefore instead of taking profit at the end of the week one could hold these trades until we reach MM1/ MS2 respectively.

The Sunday Times headline

Source: www.forexlive.com

GBPUSD H4

Price is in the sell zone. We must note that price is ranging with resistance at 1.3250 and 1.3300. I would prefer to sell there though you will notice that filling the gap will get us back up to WM3 giving Bears that sell there a target of WM1, the bottom of the range. Also remember that price came off MM3 at the start of the month so a target of MM1 is also in play.

GBPCHF H4

Price is in a tight range. Price gapped lower off of WM3. Bears are waiting for the gap to close and selling in the sell zone with a target of WM1

GBPAUD H4

Price gaped lower off of WM3. Bears are waiting for the gap to close and then selling with a target of WM1.

GBPNZD H4

Price dropped at WM3 which is also MPP. With price coming down off MM3 at the start of the month this is a key level of resistance for Bears. This pair did not gap lower so Bears are paying attention to M15 for a pullback up to the role reversal of the double top made on the M15 chart during the Friday NY session and selling with a target of WM1 or MM1.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.