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U.S. Dollar / Pound Sterling

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USDGBP trade ideas

GBPUSD - Dollar, waiting for the release of the CPI index?!The GBPUSD currency pair is located between EMA200 and EMA50 in the 4H timeframe and is moving in its upward channel. The continuation of the trend of this currency pair will depend on the maintenance or failure of this channel. If the upward trend continues due to the release of today's economic data, we can see a supply zone and sell within that zone with a suitable risk reward. In case of channel failure and downward correction, you can buy this currency pair within the specified demand zone. According to a new report by the Federal Reserve Bank of New York, consumer inflation expectations in the United States showed some changes in November compared to October. One-year inflation expectations rose to 3%, up from 2.9% last month. Additionally, three-year inflation expectations reached 2.6%, slightly higher than the 2.5% recorded in October. Five-year expectations also edged up from 2.8% to 2.9%. The Federal Reserve’s survey indicates that participants anticipate a decline in costs for gasoline, rent, and food over the coming year. Expectations about future government borrowing have also dropped significantly. The report further highlights that many respondents are optimistic about their financial situation improving next year. This positive outlook has reached its highest level since February 2020. Janet Yellen, the U.S. Treasury Secretary, has warned that Donald Trump’s tariff plans could disrupt prior efforts to curb inflation and lead to higher consumer prices. Speaking at the Wall Street Journal’s CEO Council, she stressed that broad tariffs could increase costs for American consumers and businesses dependent on imports. Meanwhile, the U.S. dollar has performed impressively this year, supported by strong economic conditions. However, Morgan Stanley analysts, including David Adams, caution that holding long positions on the dollar may now be a mistake as the currency faces downside risks. Bloomberg reports that while efforts to combat inflation have been largely successful, lingering price pressures could undermine confidence in further interest rate cuts. Reuters has reported that the Bank of England intends to maintain its cautious stance and keep interest rates steady. Simultaneously, the European Commission has advised EU member states against granting the UK greater access to the bloc’s electricity market. This recommendation comes despite warnings from the energy sector about higher costs for consumers and slower progress toward green energy transitions. In a policy document outlining the EU’s stance on future negotiations with the UK, the European Commission emphasized that the principle of “limited choice” should also apply to electricity trade. The document noted that the UK’s decision not to rejoin the single market has restricted deeper cooperation in the energy sector, and partial participation in this market would neither benefit the EU nor align with the European Council’s guidelines. In October, British and European energy companies called for a revision of post-Brexit energy trade arrangements to establish a “green energy hub” in the North Sea. They warned that the current framework is not only inefficient but also jeopardizes shared commitments to generate 310 gigawatts of offshore wind power by 2050. On Monday, the U.S. and UK announced a fresh wave of sanctions targeting what they described as the illicit gold trade. The UK claimed that this trade finances Vladimir Putin’s war efforts in Ukraine and fuels corruption. The British government froze the assets of four individuals accused of gold smuggling, as well as another individual who had purchased over $300 million worth of Russian gold, generating revenue for the Russian government. In a statement, the UK’s Foreign Office said: “Illicit gold trade is an attack on the legitimate trade of a valuable commodity, fueling corruption, undermining the rule of law, and enabling human rights abuses, including child labor.”
Long
by Ali_PSND
How Can You Use a Break and Retest Strategy in Trading?How Can You Use a Break and Retest Strategy in Trading? Trading strategies help traders navigate the financial markets with greater confidence. One such approach is the break and retest strategy, which focuses on key support and resistance levels. This article explores the break and retest strategy in detail, providing insights and practical examples to help traders apply it in their trading activities. Understanding the Break and Retest Strategy The break and retest strategy is popular among traders who aim to capitalise on clear market movements. At its core, this strategy revolves around identifying key support and resistance levels on a price chart. Here’s how it works: When the price breaks through a support or resistance level, it signals a potential shift in market sentiment. For example, if a stock breaks above a resistance level, it suggests increasing buying interest. Traders then watch for the price to return to this newly broken level—known as a retest in trading. During the retest, the former resistance now acts as support, providing a potentially more attractive entry point for traders looking to join the trend. This strategy aligns well with trending markets, where prices move consistently in one direction. It allows traders to take advantage of momentum while managing their entries potentially more effectively. The Mechanics of Break and Retest Trading Implementing the break and retest strategy involves a clear sequence of steps that traders follow to identify and act on potential market moves. Here’s a breakdown of how this strategy typically operates: 1. Identifying Key Levels Traders begin by pinpointing significant support and resistance levels on their charts. Accurate identification is crucial, as these levels form the foundation of the strategy. 2. Monitoring for a Breakout Once the key levels are established, traders watch for the price to break through one of these barriers, in line with a broader trend. A breakout occurs when the price moves decisively above resistance or below support, often accompanied by increased trading volume. This surge in volume indicates stronger market interest and can validate the breakout’s legitimacy. 3. Waiting for the Retest After the breakout, the price typically retraces to test the broken level. For instance, if the price breaks above a resistance level, it may pull back to that same level, which now acts as support. This retest phase is critical as it offers a second confirmation of the breakout’s strength. 4. Confirming the Retest During the retest, traders look for confirmation signals to ensure the breakout is genuine. These signals can include specific candlestick patterns, such as pin bars or engulfing candles, and continued high trading volume. Successful confirmation suggests that the new support or resistance level will hold, increasing the likelihood of a sustained trend. 5. Entering the Trade With confirmation in place, traders often enter the market, aiming to ride the new trend. They may set stop-loss orders slightly below the new support (in the case of a breakout to the upside) or the new resistance (in case of a breakout to the downside) to manage potential risks. 6. Managing the Trade Effective trade management involves setting target levels based on previous price action and adjusting stop-loss orders as the trade progresses. This helps to lock in potential returns and potentially protect against unexpected market reversals. Break and Retest Example Strategy Consider this EURUSD 15-minute chart, which displays a clear bearish trend. This trend is highlighted by the 50-period Exponential Moving Average (EMA) sloping downward, with the price generally staying below it. Recently, the price broke below a key support level on higher-than-average volume, signalling a potential opportunity for traders to apply the break and retest strategy. In this scenario, there are two support levels to monitor. The first is a more significant support level. Trading at this level can allow traders to enter the market quickly, though it comes with a less favourable risk-reward ratio. The second support level is found within the recent brief retracement. This level offers a better risk-reward ratio, but there's a chance the price may not retrace deeply enough, potentially causing traders to miss the trade. The entry point is identified by a candle with a wick longer than its body (a pin-bar on the 30m chart), indicating rejection of higher prices as the market retests the second broken support level. Once this candle closes, traders can enter a market order. Stop losses would typically be placed either above the last major swing high or above the 50-period EMA, depending on individual risk tolerance. Take-profit targets could be set at a 1:3 risk-reward ratio or at the next significant support level, where a price reversal may be anticipated. Improving the Break and Retest Strategy Enhancing the break and retest strategy involves integrating additional tools and techniques to refine trade decisions. Here are several methods to consider: 1. Incorporating Additional Indicators Using break and retest indicators like the Relative Strength Index (RSI) or the Moving Average Convergence Divergence (MACD) can provide valuable insights. For instance, an RSI crossing below 70 during a bearish breakout may indicate weakening momentum, supporting the retest. Similarly, the MACD crossing above its signal line or the MACD histogram rising above 0 can confirm the uptrend’s strength, aiding in more precise entry points. Explore these indicators and more than 1,200+ trading tools in FXOpen’s free TickTrader trading platform. 2. Multi-Timeframe Analysis Examining charts across different timeframes helps in gaining a broader market perspective. A breakout observed on a 4-hour chart gains additional confirmation when a strong trend is also visible on a daily chart. This alignment across timeframes increases the reliability of the trade setup. 3. Utilising Fibonacci Retracements After a breakout, prices often retrace deeper into the previous high-low range—not always to the most extreme point. Applying Fibonacci retracements to the high/low of the breakout (high in a bearish breakout and low in a bullish scenario) and the new low or high can help identify optimal retest points, particularly at the 38.2%, 50%, and 61.8% levels. These levels typically offer better risk-reward ratios compared to the extreme points. 4. Incorporating Fundamental Analysis Supporting technical breakouts with fundamental factors, such as economic reports or news events, strengthens the strategy. For example, a breakout aligned with positive economic data may have a higher probability of sustaining the new trend, providing traders with greater confidence in their decisions. Advantages of the Break and Retest Strategy The break and retest strategy offers several advantages that can enhance a trader’s approach to the markets: - Increased Confidence through Confirmation: The retest serves as an additional validation of the breakout, boosting trader confidence in their entry decision and reducing hesitation. - Better Risk Management: Setting stop-loss orders based on the retest level provides a clear risk boundary. This structured approach aids in potentially managing losses. - Alignment with Market Trends: This strategy naturally aligns trades with the prevailing market trend. By trading in the direction of the breakout, traders can take advantage of sustained movements. - Versatility Across Markets: The breakout and retest strategy can be applied to various financial instruments, including forex, stocks, and commodities. Its adaptability makes it a valuable tool in diverse trading environments. - Scalability and Flexibility: This strategy can be adapted to different timeframes and trading styles, making it suitable for both short-term and long-term traders seeking to implement a consistent approach. Potential Challenges and Considerations While the break and retest strategy can be a powerful tool, traders may face several challenges when implementing it: - False Breakouts: Not every breakout leads to a sustained trend. Sometimes, the price moves beyond a support or resistance level only to reverse shortly after. Recognising these false signals is crucial to avoid entering trades that may quickly turn against expectations. - Market Conditions: According to theory, this strategy performs best in trending markets. In sideways or highly volatile environments, breakouts can be less reliable, making it harder to distinguish genuine opportunities from random price movements. - Timing the Retest: Accurately determining when the price will retest the broken level can be challenging. Entering too early may expose traders to unnecessary risk, while waiting too long might result in missed opportunities if the retest doesn't occur as anticipated. - Reliance on Confirmation Signals: While additional indicators like RSI or MACD can enhance the strategy, over-reliance on these tools can complicate decision-making. Traders need to balance multiple signals without becoming overwhelmed or confused. - Emotional Discipline: Maintaining discipline during retests is essential. Traders might feel pressured to act quickly if the market moves unexpectedly, leading to impulsive decisions that deviate from their trading plan. The Bottom Line The break and retest strategy offers a structured approach to navigating market movements, combining precise entry points with effective risk management. By understanding and applying this method, traders can potentially enhance their trading decisions and align with prevailing trends. To put this strategy into practice across more than 700 markets, consider opening an FXOpen account and gain access to four advanced trading platforms, low trading costs, and rapid execution speeds. FAQ What Is a Retest in Trading? A retest occurs when the price returns to a broken support or resistance level after an initial breakout. It serves to confirm the strength of the breakout, helping traders decide whether the new trend will continue or if the breakout was false. What Is the Break and Retest Strategy? The break and retest strategy involves identifying a breakout of a key support or resistance level and then waiting for the price to return to that level. Traders use this retest as a confirmation to enter the market, aiming to follow the new trend with reduced risk. What Is the Win Rate of the Break and Retest Strategy? The win rate of the break and retest strategy varies depending on market conditions and how the strategy is applied. Consistent application and effective risk management are crucial for achieving better results. How Many Times Should I Backtest My Strategy? Backtesting should be done extensively across different market conditions and timeframes. According to theory, traders need to test a strategy on at least 100 trades to ensure its reliability and to understand how it performs in various scenarios. Does the Market Always Retest? No, the market does not always retest broken levels. While retests are common, they are not guaranteed. Traders should use additional confirmation signals and be prepared for both possibilities when applying the break and retest strategy. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
1
The BoE's interest rate cut path is becoming unclear. Bloomberg Economics reports that the Bank of England (BoE) is unlikely to keep cutting interest rates after 2025 due to an overheating economy and the risk of rising inflation. While BoE Governor Bailey anticipates four 25bp cuts next year, markets are skeptical about the central bank's ability to further reduce rates without igniting inflation. GBPUSD continues its uptrend, holding above the trendline. Both EMAs widen the gap, indicating a bullish momentum. If GBPUSD holds above the trendline, the price could gain upward momentum toward the resistance at 1.2850. Conversely, if GBPUSD breaks below the trendline, the price may retreat to the support at 1.2715, where EMA78 coincides.
by inkicho_exness
"GBP/USD: Expert Buy/Sell Strategies"FX:GBPUSD Chart Analysis: GBP/USD 1-Hour Timeframe Current Market Structure Price Level: The price is currently trading around 1.27749. Resistance Zone: Around 1.27800 (marked as RB). Support Zone: Around 1.27435 (marked as BB). Market Volatility: Multiple Break of Structure (BOS) and Change of Character (CHoCH) points indicate a volatile market with frequent shifts in sentiment. Buy Strategy Confirmation: Wait for the price to break above the resistance band (RB) at 1.27800 with a strong bullish candle. Entry: Enter a buy position once the price closes above 1.27800. Stop Loss: Place a stop loss below the recent swing low or below the support band (BB) at 1.27435. Take Profit: Target the next significant resistance level or use Fibonacci extensions for potential targets. Sell Strategy Confirmation: Wait for the price to break below the support band (BB) at 1.27435 with a strong bearish candle. Entry: Enter a sell position once the price closes below 1.27435. Stop Loss: Place a stop loss above the recent swing high or above the resistance band (RB) at 1.27800. Take Profit: Target the next significant support level or use Fibonacci retracement levels for potential targets. Additional Confirmations RSI: Look for RSI to be above 70 (overbought) for sell signals and below 30 (oversold) for buy signals. MACD: Look for MACD line crossing above the signal line for buy signals and below the signal line for sell signals. Volume: Ensure there is significant volume supporting the breakout or breakdown to confirm the move. This should provide you with a structured approach to trading the GBP/USD pair based on the current chart setup and technical indicators. If you have more specific questions or need further clarification, feel free to ask! FX:GBPUSD
by Alexgoldhunter
GBPUSD moving higherTrend: LSMA moving lower since 9/30/24 Momentum: Bearish but closing toward Neutral Japanese Candles: Bullish One White Soldier - Could become a Morning Star reversal Chart Pattern: None Support and Resistance: 1.2650 is Support, 1.3100 is Target Fundamentals: U.S. CPI and PPI this week. Trade: Open Long 12/2/24 @ 1.2637 Stop: 0.1.2500 Target: 1.3100 Risk:Reward is 1:3.37 The close two weeks ago back above 1.2650 is evidence the break below was a head fake. Still, risk here until a Morning Star pattern reversal is completed with a close above 1.2800, near the midpoint of the last bearish candle in the selloff. We may need 1.2825 to scare the bears to close. This will drive bears to close their position and will rally the pair. This pair is often volatile so that any move could happen quickly. With momentum, the first target is 1.3100. There is a slew of US data this week. Anything holding the USD back is bullish for GBP.
Long
by positionforex
4
GBPUSD POSSIBLE SELL The market is currently forming a Daily Reversal pattern . Based on 4HR TF, the market seems to be forming a possible reversal chart pattern as well. We could see Sellers coming in strong should the current level hold. Disclaimer: Please be advised that the information presented on TradingView is solely intended for educational and informational purposes only.The analysis provided is based on my own view of the market. Please be reminded that you are solely responsible for the trading decisions on your account. High-Risk Warning Trading in foreign exchange on margin entails high risk and is not suitable for all investors. Past performance does not guarantee future results. In this case, the high degree of leverage can act both against you and in your favor.
Short
by WiLLProsperForex
GBP/USD Analysis by DreamsFX HubTechnical Analysis: The current price action around $1.2735 is critical. Traders are watching this level closely; a break above could signal a move towards $1.2865, indicating a continuation of the bullish momentum. This level acts as a pivot, and its breach could attract more buying interest, reinforcing the upward trend in the short term. Market Sentiment: The general market sentiment leans towards cautious optimism for GBP buyers, especially as the price approaches key support levels. The expectation here is that if the price holds above these supports, such as the 200-day EMA, there could be a significant bounce, pushing GBP/USD towards higher targets. This sentiment is underpinned by technical indicators like RSI and MACD, which might suggest an oversold condition ready for a bullish reversal. Fundamental Insights: Recent comments from the Bank of England regarding potential rate cuts have introduced a layer of complexity to GBP's outlook. However, if these rate cuts are perceived as a measure to control inflation without severely impacting economic growth, it could actually support GBP in the medium term by preventing overheating and fostering sustainable growth. This scenario might encourage buying as traders look for value in GBP amidst a more balanced economic policy outlook. Conclusion for Buyers: For those looking to buy GBP/USD, the current environment suggests patience while waiting for confirmation above $1.2735. If this level breaks, the buying case strengthens, aiming for targets like $1.2865. The combination of technical support and a nuanced view on the BoE's policy direction could provide a foundation for a buying strategy, focusing on entries at or slightly above this key level with stops placed below significant supports to manage risk.
Long
by DreamsForx
GBPUSD FOR THE MONEYTechnical Observations Support and Resistance Zones: Support Zone: 1.2700-1.2720 (highlighted in green). Immediate Resistance: 1.2800 (psychological barrier and target 1). Major Resistance: 1.2900 (target 2 and a significant level for breakout). Moving Averages: 50 EMA and 200 EMA show a consolidation phase but lean towards a bullish sentiment above the 200 EMA. Price is testing the 50 EMA repeatedly. RSI: Current RSI (on shorter timeframes): Hovering near 50, indicating consolidation with neither strong overbought nor oversold conditions. RSI above 60 may signal bullish momentum; below 40 could indicate bearish movement. MACD: Slight bullish crossover on lower timeframes, but momentum appears weak. Trend: Short-term bullish recovery off the 1.2700-1.2720 support zone, with consolidation near 1.2750. Trading Strategy for GBP/USD Scenario 1: Bullish Breakout Above 1.2750 Buy Entry: Place a long position at 1.2760-1.2770 after price closes above the 50 EMA on the 15M or 30M chart. Stop Loss: 1.2680 (below the 200 EMA and recent swing low). Target 1: 1.2800 (psychological resistance). Target 2: 1.2900 (next major resistance). Indicators to Watch: RSI should break above 60 for confirmation of bullish momentum. MACD histogram showing increased bullish divergence. Scenario 2: Range Trading Between 1.2700 and 1.2800 Buy on Pullbacks: Enter a long position in the support zone (1.2700-1.2720). Sell Near Resistance: Close positions around 1.2800 or partially take profits at 1.2760. Stop Loss: 1.2680 (below the support zone and 200 EMA). Indicators to Watch: Monitor RSI bouncing off 40-45 in the lower range. MACD should remain neutral or slightly bullish. Scenario 3: Bearish Breakdown Below 1.2700 Sell Entry: Open a short position at 1.2680-1.2670 if price closes below the support zone and 200 EMA. Stop Loss: 1.2750 (above the 50 EMA and recent consolidation). Target 1: 1.2600 (next key support). Target 2: 1.2550 (major support below). Indicators to Watch: RSI dropping below 40, signaling bearish momentum. MACD showing increased bearish divergence. Key Reminders Risk Management: Use no more than 2-3% of your capital per trade. Set stop-loss levels to protect against sudden reversals. Wait for Confirmation: Ensure price closes above/below critical levels before entering positions. Avoid trading in choppy, indecisive markets. Monitor News Events: GBP/USD is sensitive to UK and US economic data. Avoid trading during high-impact news (like employment or BoE announcements). Final Recommendations Focus on buying near 1.2700-1.2720 for higher probability trades in this current range-bound market. Target 1.2800 for short-term profits or 1.2900 if the breakout holds. Be cautious of a breakdown below 1.2700, which could signal a trend reversal to bearish territory.
by DerrickJerry