27 Nov GBP:USD, EUR:GBP And General Trading Round-Up; 27th Nov 2013
You may recall my recent choice to take a risky trade in AUD:NZD whilst waiting for a EUR:GBP set-up to fully play out. Obviously I could have entered both trades but on the basis that the EUR:GBP set-up didn’t look quite ready for entry, and the AUD:NZD despite being far riskier did, I just went with the latter.
Unfortunately for me, the EUR:GBP short would have been an instant winner, whilst the AUD:NZD one is yet to show a profit of any kind! In fact I widened the stop slightly on the AUD:NZD long on the basis that my original stop placement didn’t leave enough breathing space. At present the AUD:NZD position is showing a loss of approximately 140 pips whilst the EUR:GBP trade, had I taken it, would now be showing +180 pips!
Although frustrating, its just a feature of the game we are playing hence why I usually make a conscious decision to write off the loss associated with the risk I’m prepared to place on a trade right from the start. That said, the trade isn’t wrong until the stop loss gets hit although I suspect I’d need a bit of luck to avoid that happening with AUD:NZD.
Anyway, what I really wanted to show is the current EUR:GBP situation and the current GBP:USD chart which looks quite interesting.
Although I feel it may be a little late now to enter this trade, I’m still following the move with interest and have an initial EUR:GBP target of 0.8256 as defined by the support level marked on this chart. As 0.8256 is the main initial target and price is already fairly close to it one would have to assess the risk before entering the trade so late into the move. However, if support does go, even if only briefly which is probably likely, we could see lower numbers ahead therefore making the risk more palatable:
Moving on to a much prettier chart, GBP:USD Monthly looks like a classic triangle set-up with a fake break-down (yes, it did fool me and I nearly did short the breakdown), and a rapid bullish move back to the top of the triangle. Technically until a break-out is confirmed the triangle remains as resistance so despite this being the Monthly chart there will probably be some day trading opportunities to scalp shorts from this probable resistance area. As for the bigger picture its just a case of waiting to see if a break-out is forthcoming:
One thing you can’t deny, its a very interesting looking chart and I look forward to seeing, or preferably trading the outcome!