GBPAUD Got Slayyyed
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Good morning traders, I hope everyone made money last night or at least learned a valuable lesson! I know i did, and that's what I am going to share with you all today (just thank me later) ;)
Okay so check it, Last night right before London session I was watching GBPAUD, and I couldn't help but notice it was starting to break out of this bull flag channel (in black) that it has been in for quite some time. Either way, it is still a channel and just because it didn't break to the upside doesn't mean we can't trade it; so I did!
I was watching this pair mainly from the 1hr time frame. I also used the 2hr and 30min time frames to watch for a confirmed break below the bottom of the channel. It did confirm 2 times (circled in black). On the second attempt to break back into the channel the market was met with the 20 EMA (in blue) and the 50 EMA (in red) on the 30m time frame, so that helped solidify the new resistance and keep the downside momentum going.
At the time of the market making its initial break below the channel the MACD had come together, but then it split back apart signaling more downwards momentum, since it did not crossover during the time it came together. At that same time the 20 EMA and 50 EMA were also crossing over, signaling more downwards momentum coming. I also noticed that the Stoch RSI was in it's overbought territory, and it was starting to crossover and heading downwards (that's what I call the stars aligning)!
KEEP IN MIND ~ I did not enter this trade upon initial break, you must wait for the breakout and that breakout must confirm the old support as new resistance, or visa versa. The higher the time frame to confirm as new support/resistance the better. On this particular trade, I waited to confirm the new resistance on the 2hr time frame.
At this point in time the market is finding support here at the Weekly support level of 1.825 (I knew I should have set my TP here but was being conservative).. Being that the New York session is almost over the market is going to slow up a bit and we could see some consolidation at this level, however, I will have to wait to see the Daily PA close for today to determine where the market may go next. It does appear though that more downside is in sight and this weekly support will be taken out (hi-yahhh)!!
~Mainstay
**This information is for educational purposes only, and is not a recommendation to buy or sell**
Okay so check it, Last night right before London session I was watching GBPAUD, and I couldn't help but notice it was starting to break out of this bull flag channel (in black) that it has been in for quite some time. Either way, it is still a channel and just because it didn't break to the upside doesn't mean we can't trade it; so I did!
I was watching this pair mainly from the 1hr time frame. I also used the 2hr and 30min time frames to watch for a confirmed break below the bottom of the channel. It did confirm 2 times (circled in black). On the second attempt to break back into the channel the market was met with the 20 EMA (in blue) and the 50 EMA (in red) on the 30m time frame, so that helped solidify the new resistance and keep the downside momentum going.
At the time of the market making its initial break below the channel the MACD had come together, but then it split back apart signaling more downwards momentum, since it did not crossover during the time it came together. At that same time the 20 EMA and 50 EMA were also crossing over, signaling more downwards momentum coming. I also noticed that the Stoch RSI was in it's overbought territory, and it was starting to crossover and heading downwards (that's what I call the stars aligning)!
KEEP IN MIND ~ I did not enter this trade upon initial break, you must wait for the breakout and that breakout must confirm the old support as new resistance, or visa versa. The higher the time frame to confirm as new support/resistance the better. On this particular trade, I waited to confirm the new resistance on the 2hr time frame.
At this point in time the market is finding support here at the Weekly support level of 1.825 (I knew I should have set my TP here but was being conservative).. Being that the New York session is almost over the market is going to slow up a bit and we could see some consolidation at this level, however, I will have to wait to see the Daily PA close for today to determine where the market may go next. It does appear though that more downside is in sight and this weekly support will be taken out (hi-yahhh)!!
~Mainstay
**This information is for educational purposes only, and is not a recommendation to buy or sell**
Anmerkung
I would also like to mention that yes this trade was not the best risk to reward, but I was very confident in the setup. As I mentioned, I could have easily caught more pips.
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