Transcript of Video
Hello everyone, this is today’s video analysis for January 10, 2019. Today we’re looking at the Greater British Pound versus the US Dollar [GBPUSD] for today’s trade analysis.
Over the past several days, we’ve seen this currency pair finding support into the 1.2730, 1.2700 support zone. All the colored shaded areas that you see here on my chart are intended to be specifically decision points in the market where I believe the market is making specific decisions to buy, sell, enter and exit, and that’s where I want to do the same thing. If the market is doing it there, I want to consider making my decisions at the same levels.
Let’s talk about this. Look along the blue circles. Let’s look. The green-shaded area, 1.2730, 1.2700. The blue circles all show support into this green-shaded area. Every time it’s come down where the blue circles are, it found support, turned around and went back up. And that doesn’t guarantee that’s what’s going to happen forever, but there’s a consistency here to the market.
A consistent decision here that the market has made decisions to find support just above the 1.2700-level into that green-shaded area. So, we take that knowledge, bring it into the current market, and let’s zoom it in a little bit and now you see the past several days. I’m just going to grab this black circle right here and widen it out a bit. And say the past several days here, where the black circle is, has again also shown support into that green-shaded area.
So, it’s piquing our interest and saying hey, if historically the market has found decisions to make support into 1.2730, 1.2700, and in the past three days at least it’s done that, maybe I want to consider trading decisions that imply buying into support just as the market has done. And we can do that confidently with somewhat of a limited risk because we know what the risk is. The risk is that it doesn’t find support here, which is what we’re expecting, and it goes through that level and goes back down.
So, we know what the risk is. The risk is pretty limited. It breaks back underneath 1.2700. The expectation is it continues to do what it’s consistently done over the past several months and finds support at that green-shaded area. So, it gives us opportunity to trade like the market has been trading, which is trading this green-shaded area as support. We could target of course levels that go higher.
We can target the orange zone. We can target even the yellow zone as it continues to go higher because that gives us limited risk. Remember what we try to do is find lower risk and higher reward trades. So, our risk is just underneath 1.2700. Our reward or potential profit back in towards the 1.2800-level, top of the orange zone, or even in towards the upper-1.2800s, 1.2850, 1.2880, the yellow zone. And so, we can have limited risk, higher reward, making a decision at a consistent level of market decision.
Even if you want to get picky about it, the other side of that story is right here in this area, where the black circle is. It found consistent resistance. So, not only is it a consistent level of support decision, but it’s also been a consistent level of resistance decision. So, we can tell specifically that this green-shaded area is an area where the Forex market, not you and me, individual traders, but the Forex market has made significant trading decisions. And so, if the market is doing that, we might consider doing that as well, focusing in on today support into the green-shaded area for the GBPUSD.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.