Charts Clear My Head

News spikes always mess with my psyche. Always have. It’s why I stopped trying to scalp. I get way to overloaded with adrenline and I get sloppy, desperate, and loose with my trigger finger. Getting into trades like that is disatrious for anybody and I know it. So when I do it, I have to recognize the problem and walk away.

My walk takes me to the daily chart. It looks like cable has done something making new lows at 1.5185. We haven’t seen price at these levels since May 2009 and that was at the beginning of the rally that would take price past 1.7000. The first bearish wave gave us 465 pips. This second bearish wave only gave us 416 pips. I expect more from a second wave of such a strong trend. Read why here. First red flag.

Next yesterday’s new low at 1.5185 didn’t break 75 pips below the very important 1.5250 level. And price hasn’t returned nor remained below 1.5250 since correction back to 1.5294 before the UK GDP release. However, price did break 75 pips above 1.5250. Maybe a hint as to the direction? Ready why here. Second red flag.

The Japanese yen has lost ground in today’s session which signals increased risk appetite to me. If US GDP also beats expectations, perhaps risk appetite increases. Higher risk equals a higher pound. Third red flag.

Using Fibonacci, we see several possibilities for resistance, including 1.5345 former-support-turned-resistance. The big one that stands out to me is 1.5500 marking 50% retracement of this entire down leg from 1.5815 to 1.5185.

This is a countertrend set up so consider the risk that the trend resumes and price heads back towards the 1.5185 low. And US GDP is due later this session. Trade what YOU see, not what I think!