GBPUSD H1 Chart
GBPUSD M5 Chart
Technical Analysis: The price has broken below the Brexit low and the price is now left with no immediate support level to hold the price, signaling for multiple plunges.
The price has fallen steeply from the top of a minor falling trend channel and thus expecting the price to fall again very soon after its current pause.
Market Sentiment: As the price has broken lower than Brexit low, it sends a clear signal that pound will have to continue to fall further and as U.K. move towards exiting the EU.
The level of uncertainty caused by Brexit and the fact that price has just broken Brexit low show price can only go in one direction for now – down.
Trading Plan: Entered half-risk while using the M5 chart to identify 2 minor retracements. This is because the fall is very steep and that it is only the first wave of depreciation since it broke below Brexit low.
However, the expectation of price retracing further is still intact and therefore will also be waiting to sell another half-risk as it reaches the resistance zone starting from 1.2820, as well as the top of the minor falling trend channel.
Stop loss is set 20 pips above the top of the resistance zone.
[05/10/16-11:18] Stop loss has shifted to 20 pips above the new minor resistance zone and thus the risk is reduced.
GBPUSD M15 Chart
Entered a new trade with the reduced risk and match up to the normal risk as the price is reaching the top of the minor falling trend channel and within the resistance zone after 2 minor retracements have completed.
The price is expected to plunge again and the next key price level is 1.26 based on the previous wave of depreciation (refer to D1 chart).
[16:28] Exited half-risk as the price unexpectedly pulled back and fully recovered from a dip which increased uncertainty and showing signs of exhaustion of seller.
[19:14] Full exit as the price has broken above the top of the minor falling trend channel and the price seems to be forming a 2nd wave of minor retracement.
Result: Gain 0.65%