There seems to have been a breakout on the daily chart which would be a continuation of the downtrend. The RSI also broke a support on the same candle.

The 4 hour chart agrees.

There is no MACD divergence or lower high to support this, though there is a RSI divergence on the H4 chart. Obvious stops for me are about 100 or 220 from the Friday close. I'll probably not take this unless there is a return to test the broken support.
With the budget on Wednesday there could be significant moves on GBP pairs, I think I'd rather stay out of the way in case I get on the wrong side...

All the best

Michael

If you look at it from this prespective.


You might prefer to wait for a long trade setup. Personally I will do nothing on this pair until a MACD convergence/divergence forms. As you can see there is no MACD convergence/divergence in this entire screen shot
therefore I stay away.

Hello Michael,

as you know, I entered a short trade with this pair last week, but that didn't work out for me.
The daily chart had a bearish engulfing candle (15th March) following a break above the BMB. This looked a good indication of continuation of the long-term downtrend.
But the market went up and formed a high. Although it is not obvious because the MACD is below the zero line, there is convergence on the Daily. There is also slight convergence with the RSI.
So I think that you are right to be looking for a short trade set-up.
Of course, the support line is a little too steep and was broken by a very long bearish candle. If trading the Daily chart a stop in the region of 400 pips would be necessary and so not a very good R:R



On the H4, there has been a fairly strong bearish movement. The bulls dipped their toes in the market and supported the price just above the BMB. The bears came back and once they managed to break down the BMB, the bulls folded.
It looks like the bulls were resting and the bears stayed in control until abruptly stopped at the level of the last low. This, combined with the long candle that broke support and that RSI shows oversold, makes me think that you are absolutely right to hold back for now. Certainly a testing of the broken support may give the bears the opportunity to rally forces and come back under fresh steam.



Nice work Michael


Best of luck

Keith

Though this did fall further on Mondays open the decline was short lived and it was up from there. A short trade taken when the market opened would be around 200 pips in the red now.

The H4 chart shows that it has returned to the broken support line which is now acting as resistance.
No obvious setup here that I can see, though its worth noting that the daily has tested the BMB area and is going positive at the moment. This could signify that there is more upside than downside in the near future.

All the best

Michael

Hello Michael,

this is quite a good idea to continue with impressions of one currency pair like this

Have you glanced at the H1 chart ?

This does show a triple-top and divergence with the MACD, but note that the last 4 candles are all indecisive and above the bollinger middle band.
The support line looks reasonable, so if the bears can get the momentum together to break the bollinger middle band and then support, there may be a good chance that they will keep going for a while. I would want to see the Bollinger bands start to widen though.



The main trend on the Daily is bearish, but the recent mood is mostly bullish. Mind you the bears have not been a walkover and though there have been a series of higher highs, the bears have taken the price down 200 to 500 pips from its peaks. Given that, it is not unreasonable to think that the price on the Daily may go down to test the BMB again. A drop of about 180 pips, which may allow a short trade to work on the H1.

The broken support, now acting as resistance on the H4 also reinforces the possibility of a trade on the H1. No good indication to trade on the H4 as yet though.

Just sharing with you my take on this pair. The RSI is fluffing around the 50 mark on the H1 and Daily and doesn't look oversold on the H4.
I don't intend any trade for now, especially as I am waiting for a shorting opportunity with EUR-JPY

Hi Keith

I'm deliberately staying away from the H1 charts most of the time, except maybe for an entry point for a formed setup on longer time frames. I don't have the chance during the working day to watch setups mature on H1, and then manage the trades if I get them. I'm trying to go for setups on the Daily charts primarily and also H4 sometimes.

I note that there was a false breakout above your H1 resistance line. I'd probably have taken that as a long trade a few months ago!

All the best

Michael

Probably sensible Michael, although the hourly charts will offer you more trades, they are considered more risky than H4 and Daily.
oops - I think that I may have to be more careful with my lines on the charts. That blue line wasn't meant to be resistance (although it does coincide with the double/treble top), it was supposed to show the divergence with MACD.
Problem is that I know what the lines I put on my charts refer to, of course it is not always obvious. But then in this case it was a resistance level, so I can understand.

Cheers


Keith