Technical Analysis – Forex Update: Watching News and Buying USDJPY with Caution
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First off, starting here on the Greater British Pound versus the US Dollar [GBPUSD]. Of course yesterday we saw a significant rally on polls about the exit as the market turned from the 1.4400-level, all the way back up here into the 1.4600-level. Then it paused for a few hours as we approached the FOMC release yesterday at 2PM Eastern US time. Shortly after that, we saw the market start to become a little bullish for the US dollar or bearish here for the GBPUSD.
Took a quick sell. A quick short here into the 1.4605-level. The market went down about 30 pips and then turned right back around and came back up. Fortunately, we had applied the trade manager to the trade. When I saw 30 pips of profit, the trade manager took us to break even on the trade. It came back up, took us out, went back down, and then right back up again. So, while it was a break even trade, there was an opportunity to see about 30 or maybe even a little bit more pips as it came all the way back down to the bottom of our previous four-hour candle.
Next, moving over to the Australian versus the US Dollar [AUDUSD]. We’ll study this a little bit more in the live Trade Room today, but we see the previous uptrend. The current downtrend. We’ve been playing the current downtrend over the past few days. You could see the trade still going. I have a small amount of lots left on the trade. Closed a majority of the profit already, but I have a small amount of lots on the trade, sitting with 127 pips.
Let’s go ahead and zoom it in a couple of times here on the daily timeframe. Our entry was all the way up here at the purple-shaded area. We typically often will suggest selling on rallies into resistance after breaking through a support. So, we had the support back here. Broke through it. Rallied the resistance underneath the 100-period moving average and the trend line. Took a short there into the purple-shaded area and have seen significant profit all the way down here towards the 0.7190-level.
I have closed, again, a majority of the profit as it’s touched down here into our next target. If it continues to go lower today, of course we’ll look for it. Low-0.7100s, down here closer towards the 0.7100-level, the blue-shaded area at the bottom of the chart. Otherwise, we want to protect as much profit as we can because if we see any bounce off of the 0.7200 or just in the upper-0.7100s, we want to protect as much profit as we can now on the AUDUSD.
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