Trade Recommendation: GBPUSD

With the recent bearish action the Pound continues to show weakness. The major resistance at the Monthly Pivot Range has held but now we need confirmation to see if the price will hold at current lows as we are approaching a test of this level at the time of this writing.

The action to take is to place a sell order to enter the market short if the market trades below the swing low of 1.3916. This will confirm the market wants to move lower. Place the stop loss and the profit targets stated below.

Entry Price: 1.3916

Stop Loss: 1.4010

Profit Targets: First profit target 1.3810. Second profit target 1.3725. Once price reaches the first profit target lower the stop loss to breakeven. Then if the market follows through to lower levels manage the trade by trailing a stop loss 50 points behind until second profit target is reached or stopped out.

Disclaimer: The writer has no positions in the forex markets but does engage in short-term trading of forex and futures.

Featured image courtesy of Shutterstock.

I am the founder of VirtuesTrading.com, where traders can learn to use my Virtues Trading System. Formerly a Commodity Trading Advisor, I got my start in the Energy and Precious Metals Options & Futures pits of the New York Mercantile Exchange. I operate on the premise of efficient markets, the management of risk through the analyzation of price action and technical indicators. I have a BA in International Relations from the University of Southern California.