Day trade
Trade view / 22 June 2016 at 8:56 GMT

Making a counter-trend trade in GBPUSD

Analyst / PIA First
United Kingdom

We've taken a small GBPUSD counter-trend short this morning and here is why. 

The monthly chart highlights a disjointed bullish Gartley formation. It is anyone’s guess, with the Brexit vote tomorrow, where GBPUSD will close. A close near this month’s high and we would have a strong A.M.R candle (acute monthly reversal) in the shape of a bullish Outside Bar.

Source: Saxo Bank 

The daily chart highlights an Elliott Wave five wave pattern complete at 1.3833. We are now in either a complex corrective cycle that should break to new highs or the start of a new bullish trend. All these factors give a positive bias for the medium term. The Marabuzo level from Monday is seen at 1.4569. Bespoke support is at 1.4510. We look for this zone (1.4569-10) to attract buyers once more. 

However, we did post a Doji-style candle yesterday after reaching an intraday 261.8% extension level. This offers scope for a short-term correction. 

 Source: Saxo Bank

The intraday chart highlight bearish divergence from the high (chart makes a new high while the oscillator makes a lower high). This is normally followed by a change of trend or at least a correction. The two and one-hour charts highlight a bearish Outside Bar from this morning high. This offers a downside bias for today.

 Source: Saxo Bank

With a stop at 1.4716 and targets at and targets at 1.4603 (bespoke support) and 1.4548 (AB=CD formation) this offer a risk against reward trade of approximately 3:1. 

Management and risk description

It has be noted that this is a counter-trend trade (at the moment!)


Entry: market (2 units)

Stop: 1.4716

Target: 1.4603 (bespoke support) and 1.4548 (AB=CD) 

Time horizon: today only

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
22 June
Anton Bushin Anton Bushin
HI you close the deal by the SL, or reentered from this levels?
22 June
pedgarc pedgarc
Hello Ian, actually the GBPUSD is around 1.4699, do you think there are possibilities to go down?
22 June
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I still like the correction ... I am out though
22 June
pedgarc pedgarc
Thank you, I opened a sell when my SL was actived. Right now I recovered around 50% of my lost money, I have a new SL at 1.4713 (with earnings), and I hope the price go down a little more!


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