Howdy Folks,

We had a great webinar this afternoon full of really good questions. I had a lot of fun and I hope you can make it next week! There have been a few comments about the time scheduled for this webinar. I realize that 12:00PM / 19:00GMT isn’t that convenient for folks who work full time. Originally I thought these would be recorded so you could watch them on your own time but as it turns out they are not. I will chat with the FX Street folks about adding another time slot that is more convenient or moving the one we currently have.

On to tonight’s GBP/USD chart. I decided to accommodate last week’s price action by drawing the channel slightly lower. Although technically today’s daily candle closed in bargain day territory it is really a questionable sell in my opinion. Just reading the chart we see a hammer on the daily, rising support through the channel and the round number $1.62 in play here. On the four hour chart we see a possible 1-2-3 reversal pattern. However on the sell side the fundamentals may play a factor. Tomorrow there are three reports due out for the U.K. including the Halifax House Price Index. The Right Move HPI report missed the numbers by a long shot and helped fuel a GBP/USD sell off although the Nationwide HPI last week showed improvement. Even with the bullish technical picture the fundamentals may end up crushing this currency. Either way, yesterday was a bank holiday in the U.K. so I expect some fun as traders return to work tomorrow.

It will be interesting to see if today’s demand level around $1.62 holds any assault as London comes online tomorrow morning but for now, I’m patiently waiting for this currency to do something interesting…

Best of luck,

Ryan

Howdy Folks,

Monday is webinar day again and I hope you can join us! Every Monday we talk about discretionary support and resistance techniques that can be done around your day job. This webinar is at 12:00pm Pacific / 19:00 GMT and you can register via this link:

Howdy Folks,

Lots of GBP/USD selling this week, guess we have our answer on whether or not support would hold. At this time I’m in “bargain day” mode for a selling opportunity.  The chart shows and area of interest to me. This pair offered a good bargain day trade last week, may have to wait a bit for the next one. I hope your having a great trading week!

Howdy Folks,

Had a great time in this mornings webinar, I think we had nearly fifty people in the room today! I hope to see you all there next Monday! Tonight GBP/USD seems ready to test the lower boundary of the ascending channel that has been in place since late May. Personally the demand level I’m interested in watching is near $1.63. In my opinion if the channel is going to hold this demand level will be the Alamo. If not, look out below!

Best of luck,

Ryan

Howdy Folks,

Sunday came faster than I expected it would, it seems like I missed a day somehow. I hope you had a great weekend and are looking forward to trading this week! Sunday is my time to ramble thoughts about the upcoming GBP/USD trading week. I believe the story line for this trading week will be whether or not traders believe economic recovery is truly on its way or not. Last week ended with a nice rally but fundamental data was mixed all week long. It wasn’t until Ben “I can move the market with my flashy smile” Bernanke commented “the prospects for the return to growth appear good” which gave traders some hope on the back of stronger than expected home sales. One should expect some positive comments from the nations top banker considering he was “working” along with other central bankers in beautiful Jackson Hole, Wyoming. How could anyone be negative in such a beautiful place? All kidding aside it will be interesting to see whether or not the mood continues to be happy-go-lucky into Monday. If risk aversion continues to melt the Dollar may see continued selling across most of the major pairs. I’ll just have to wait and see how sentiment feels after the New York close on Monday. I typically don’t take trades on Sunday.

Technically speaking, GBP/USD is still trading within an ascending channel on the daily chart but has consolidated along the bottom half. Viewing this from the weekly chart it would appear this currency pair is ready to head higher but the daily chart is clearly readying a breakout which could go either direction. Expectations for GDP data, Durable Goods and Personal Spending could fuel a breakout so stay tuned for more thoughts as the week progresses.

Best of luck this week, I’ll be back with more tomorrow night!

Ryan

Howdy Folks,

We have reached the end of another trading week, I hope you made some pips this week! I wanted to remind you my next webinar will be Monday the 24th at 12:00pm Pacific / 19:00 GMT. You can read about it and register for this event via this link:

http://www.fxstreet.com/live/sessions/session.aspx?id=29674cef-ea35-4c0e-99b9-9d8ca53ccc44

I hope to see you there!

I’ll be back on Sunday with some preview thoughts for the upcoming trading week!

Have a great weekend!

Ryan

Howdy Folks,

No trading for me this evening. I’ve booked a couple of decent trades already this week so tonight was a lovely sunset dinner on the shores of Lake Washington with my Wife. I hope your having a great day in your corner of the globe! When I got home this evening I noticed two things. First, I missed a great bargain day trade on the EUR/JPY and second, the light in my office has burnt out and I discovered I’m out of replacement light bulbs! Since I’m sitting in the dark right now I thought we could run through the EUR/JPY bargain day setup for the sake of practice and call it a night.

As we talk about in the weekly webinar we need a few things to get a trade like this going. First, we need a bargain day. Second, we need a logical limit on risk. Third we need a profit target. On this setup we see EUR/JPY offer up a bargain day which also matched up with the top end of a small range that had setup on the daily chart. Using our Fibonacci ratio we get a nice profit target on the 61.8% level. You would have had to been quick on the trigger as the daily candle closed which in the case of my charts was 5PM Pacific. If your charts closed earlier than that it would have afforded a few more hours to plan and pull the trigger, this happens sometimes. Look around the majors tonight, there were a handful of bargain days to choose from including GBP/JPY, AUD/USD and EUR/JPY.

Any rate, I hope that helps clarify any questions you might have about my style of “bargain hunting”.  We talk about it every Monday in my webnair and I hope you can join us.

Best of luck,

Ryan

Howdy Folks,

The bargain day I blogged about yesterday didn’t work out as I expected because GBP/USD never visited the $1.66 handle before selling off, however the trade does provide a good case study for why managing profit is very important. In my weekly webinar I regularly talk about why managing profit is just as important as managing risk. In my opinion you should have a plan for taking profit before you open a trade and it should be as automatic as taking a loss is. Last night’s setup is a perfect example of just how fickle profit can be if you don’t manage it properly. Using the Fibonacci profit target tactics I discuss in my weekly webinar last night’s setup offered a potential profit target of about 180 pips. Maintaining a risk-to-reward ratio of at least 1:3 you had a maximum stop of 60 pips available. Assuming you fired a short trade near the high, say around $1.6570 the numbers worked out for a decent trade opportunity; however the trade got a little wonky overnight.

The profit target would have been at 61.8%, right around $1.6390 and sure enough the market hit that profit target. Unfortunately it shot out of $1.64 this morning like a dedicated shopper headed to a shoe sale. This is a perfect example of why managing profit is important. If you don’t have a plan to take profit you may end up hurting your overall performance. As this morning’s market clearly illustrates, profit is only good for the moment it is offered because if you wait another hour it could be gone. Be happy with what you make when you plan a trade, and trade the plan. Don’t worry about what you could have made; it’s a pointless waste of time.

So Now What?

Now I’m simply waiting for the next setup. Retail sales data is due out for the U.K. tomorrow which might give the pair some reasons to get moving again. It’s at the bottom of an ascending channel right now so perhaps there is some opportunity to the upside. We are toying with a support level around $1.6300 and it doesn’t look like GBP wants to go down without a fight.  Perhaps this ascending channel will hold. If not, it could be a strong sell off. Either way I’ll follow price and I don’t really care about all the other mumbo-jumbo.… Stay tuned.

Best of luck,

Ryan

Howdy Folks,

So GBP/USD pulls off a big ol’ rally today which puts me into “bargain day” mode as it relates to recent GBP/USD selling. I never like to pay full price for a trade that I can sell at a bargain so today’s price action is of interest. This is the type of day we talked about in the Monday webinar so it will be interesting to see how this plays out. The GBP/USD has rallied just below a potential supply zone near the round number $1.66. I’ve marked up how I see the daily and hourly chart.

Of course, I could be totally wrong which is why we use stops eh?

Best of luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

GBP/USD couldn’t catch a break over the last twenty four hours. First the Rightmove housing data was abysmal casting doubt the U.K. housing market was on the road to recovery. Second the risk mood jumped dragging down equities and sending the VIX up which added more fuel to the sell off. This price action leaves us in a quandary between selling weakness or potentially buying support. I’m not excited about anything on this currency pair tonight. I personally don’t believe this ascending channel is going to hold. I suspect it breaks later this week but we will have to wait and see. Ideally, the GBP/USD will rally a bit tomorrow potentially giving us the “bargain day” I talked about in today’s FX Street webinar.  This might give me an opportunity to sell the pair at a better price. If I sold now, I’d effectively be paying full price for a trade in the midst of a sell off.

This ascending channel may hold, it may not we will just have to wait and see how price action plays out for now. I hate it when I say something obvious. Bottom line is I don’t’ see anything worth attacking on this pair tonight. Perhaps tomorrow night.

Best of luck!

Ryan