We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • What are the Market cycles? How are #currencies impacted in these cycles? How can these cycles impact #forextrading patterns? Find out here: https://t.co/ckr2fUOWqW https://t.co/g7iT8bpi7f
  • What are a few of the common trading mistakes made by traders? Find out from @WVenketas here: https://t.co/d3OFc4yGao #tradingstyle https://t.co/wQ1MAkOb0n
  • The UK population voted the Conservative government back in with a strong majority, giving PM Johnson the backing to push Brexit through. And Sterling (GBP) likes it. Get you $GBPUSD market update from @nickcawley1 here: https://t.co/tjCHWDxoWm https://t.co/Z7Vaadxy5r
  • #Gold prices may fall while the US Dollar gains even as economic policies championed by the Trump administration invite inflation. Get your $gld markets news from @IlyaSpivak here:https://t.co/4lHhHsby56 https://t.co/zF4EyLIRWM
  • Lessons from Bretton Woods are forgotten, the US-China #tradewar represents a true existential threat to the post-World War II international trade order, and in turn, the globalized economy that has grown out of the ashes of history. More from @CVecchioFX :https://t.co/paaBxX6Xt0 https://t.co/tcjkQnaBWl
  • What are the truths and myths of #forex trading? Find out from @DailyFX analysts here: https://t.co/uF75VPzstr #FOMOintrading https://t.co/bDXG2dV3wG
  • The US Dollar technical outlook against the Euro, British Pound, Australian Dollar and New Zealand Dollar are discussed. Large wicks left signs of indecision, will reversals follow? $EURUSD $GBPUSD $AUDUSD $NZDUSD - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/12/15/US-Dollar-Technical-Outlook-EURUSD-GBPUSD-AUDUSD-NZDUSD.html?CHID=9&QPID=917702 https://t.co/dpuIppxo3F
  • What are some trading mistakes @nickcawley1 made during his career and what did he learn from them? Find out: https://t.co/y3cckNW22W https://t.co/vUQyVl6b0e
  • Growth linked currencies have gained as investors hope for progress on the trade front as well as stimulus from the Fed. The global economy however remains depressed and seems likely to remain so. Get your market update from @DavidCottleFX here: https://t.co/jt1HH9AHLM https://t.co/Yz65AMJYlm
  • RT @YuanTalks: #China temporarily suspend additional tariffs of either 10% or 5% on some #US goods scheduled to take effect on Dec 15, said…
GBP/USD Sentiment Shifting, Where to Next?

GBP/USD Sentiment Shifting, Where to Next?

2014-09-25 03:00:00
Rob Pasche, Forex Trading Instructor

Talking Points:

  • GBP/USD SSI has flipped negative
  • Trend line could support price
  • Long term buy is possible; approx. 1.60 stop, 1.70 limit

The first six months of 2014, the GBP/USD was in a strong uptrend from 1.65 to around 1.72. But it’s taken only 3 months for the GBP to give up the gains it made the first half of the year and then some. SSI has tracked these moves almost perfectly. SSI was negative throughout the entire uptrend in the GBP/USD and later flipped positive while the GBP/USD rapidly declined. A couple days ago however, the SSI flipped once again. This shift could indicate the GBP/USD is set to move higher.

SSI Flipping Negative

The image below shows the Speculative Sentiment Index (red and green) and GBPUSD’s price (black) during the past year’s uptrend and retracement. We can see that during the time that SSI was negative (red), price moved higher and during the time that SSI was positive (green), price moved lower.

A couple days ago, the SSI has flipped again to negative which could be considered a bullish signal. If SSI grows further negative, we could see GBP/USD begin to gain back its losses and possibly attempt to make a new higher high.

Learn Forex: GBP/USD SSI & Price

GBP/USD Sentiment Shifting, Where to Next?

(Screen capture from DailyFXPlus.com)

It would be best to see that SSI does on the GBP/USD the next few days. I would personally like to see SSI at -1.5 or lower before executing a long trade.

Major Trend Line on Weekly Chart

Something else I have been watching on Cable has been its reaction to the trend line extended from the low of 2013. This line was drawn parallel to the trend lines drawn during the bullish channel, a technique described in this article on Predicting Trend Lines Using Parallel Price Channels. We’ve seen two false breaks below this line the last couple of weeks with the current week’s candle staying completely above it. This kind of support is exactly what a GBP/USD bull likes to see.

With a bounce off of this trend line, the Pound could gain several hundred pips against the US Dollar without much resistance in its way.

Learn Forex: GBP/USD Weekly – Potential Supporting Trend Line

GBP/USD Sentiment Shifting, Where to Next?

(Created using Marketscope 2.0 charts)

Potential Buy Setup

Placing a buy trade for the current setup is fairly straight forward. We have clear support from the trend line and a psychological level at 1.6000 that held the intra-week move that momentarily had broken below the trend line. Setting a stop at or below 1.6000 make sense and will give this trade a lot of breathing room. We have to remember that when taking a long term trade, stop losses are typically going to be larger. Risk can be offset by using a smaller trade size. To learn more about money management, check out our Money Management Video Course.

Learn Forex: GBP/USD – Potential Buy Setup

GBP/USD Sentiment Shifting, Where to Next?

For our profit target, we can justify setting a limit at any price below the upper channel line and possibly setting it as high as the previous swing high. Regardless, we want it to be at least twice as far as we’ve set our stop. This would place our limit at 1.7000 or above.

Pound Picks Up its Pep

The GBP/USD could continue to rebound off its low making this a successful trade, but it could also move lower and cause buyers to lose money. There is no certainty in trading. This is why we encourage signing up for a demo account to practice trading risk-free until you are comfortable enough to trade with real money.

Good trading!

---Written by Rob Pasche

Start your Forex trading on the right foot with the Forex Fast-Track Webinar Series. This 4-part, live webinar course is the disciplined Traders’ Fast-Track to the Forex Market. Topics include:

  • Using FXCM’s award-winning trading platform
  • Calculating Leverage and reducing risk
  • Trading with a simple (yet effective) trading strategy
  • Maintaining for Forex account and enrolling in on-going education

This course is completely free, so sign up or watch on-demand today.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.