GBP/USD is breaking below the previous post Brexit lows. Continued Brexit uncertainties are weighing on Sterling. We outlined last week how a break down below the June 27 low on GBP/USD would be meaningful. Additionally, sentiment has increased to multi-month highs which can provide additional fuel to short positions.
In fact, the number of traders positioned to the long side are at the highest level in nearly 3 months while the SSI reading of +2.8 is the highest since January 2016.
See the live trading positioning in GBP/USD by viewing SSI here.
Therefore, the technical and sentiment pictures are lining up suggesting the down trend may be resuming.
There is some support just below 1.3000 near 1.2980 which could derail the short bias. Much below 1.3000 and the next levels become 1.2450, 1.2200, and 1.1750.
Market Interpretation
Market Condition: Breakout
Bias: Short GBP/USD
Entry: 1.3050-1.3110
Stop Loss: Near 1.3350 (-300 pips)
First Target: Near 1.2450 (+600 pips)
Second Target: Near 1.1750 (+1300 pips)
The risk to reward ratio on this opportunity is skewed to the positive. We’ve researched millions of trades and found that almost half of the traders (43%) turned a profit when implementing this simple technique of a positive risk to reward ratio. This is something that every trader has control over.
To receive additional picks or articles on using Elliott Wave Theory, join Jeremy’s distribution list.
