GBP/USD Price Analysis: 1:2 risk to reward trade setup in the making
|- GBP/USD bears seeking a break of current support and a downside extension.
- The 1-hour and 15-min time frames offering a 1:2 risk to reward scenario.
In an ongoing analysis of the Brexit noise-related volatility in GBP/USD, the following is an update to the prior analysis according to the subsequent live price action.
For a recap, the price has developed from the last analysis, GBP/USD Price Analysis: Bears about to re-engage at critical 15-min resistance? and now offers prospects for a downside extension from a 1-hour and 15 min chart perspective as follows:
1-hour chart
The 1-hour chart's M-formation has drawn in the bids back to test the neckline of the pattern.
The correction has completed a 61.8% Fibonacci retracement of the Brexit noise sell-off from the New York session.
Downside extensions can be expected as a result for the print of a lower low.
The -0.272% Fibonacci retracement of the correction is located at 1.3532 which meets prior structure.
15-min chart
With bearish technical conditions on the 15-min time frame, a trade setup would entail a break of current support and a subsequent entry on a restest of that old support which would be expected to act as resistance.
A stop-loss above the corrections' highs offers a 1:2 risk to reward scenario.
The stop loss can be moved to breakeven as soon as there is new resistance structure formed from bearish price action post entry.
1:2 R/R target achieved
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.