GBP/USD fell 240 pips on Friday Aug 4, from Thursday’s highs, affected by BoE and NFP data.
The Sterling fell sharply Thursday and Friday, triggering further negative tone for the underlying currencies near term.
The Cable, GBP/USD dropped to over 200 pips and closing below 1.3033.
GBP/AUD fell to almost 300 pips to close at 1.6437, and GBP/NZD also followed and dropped 300 pips to close around 1.7575.
I am expecting the negative sentiments would continue through to middle of this month for further price slide. On the positive note, the down move started from mid-May is likely coming to an end.
With the view, I am preparing for long trades on Sterling to hold positions for several weeks, possibly up to 6 months.
On GBPAUD, I would be watching for the price to test 1.62355 low and if that is broken, 1.620 (78-82% fibo zone) will be a good entry point for long entry in an anticipation of a reversal after breaking the July low. I would be looking to take profit at 1.7276, giving me 1000+ pips profit potential.
Similarly on GBP/NZD, a retest to 1.7343 low is likely, and if that level is broken, my long entry will be around 1.7210 level and take profit at 1.8535 (1300+ pips)
About the author
Ramesh is the author of 2 trading books “Trade Smart with 10/20/30 Rule™” and “Trade Forex with Confidence” which are available on Amazon. He created 10/20/30 Rule™ for traders to build and test their next money making trading strategy fast.