Forex Update: GBPUSD remains rangebound will buyer momentum send it higher?
Hi traders, today’s we’re looking at the Cable as price continues to consolidate after its recent leg higher.
Looking at the GBPUSD daily chart below we can see the sharp reversal after sellers hit new lows for 2021. Currently, price remains held in a price range between 1.3630 and 1.3575. There are two ways we can look at this, first we look to follow momentum and would look at buys if price can close above the top of the range making a higher breakout. We can see new momentum higher based on the fast trend break seen on the 5th of October.
Secondary, we could look at a straddle, this strategy involves a trader placing a buy stop above the range and sell stop below the range. Once the market makes up its mind and fils one of the orders the other order is cancelled and the trader would add stop and take profits according to their risk management rules in their trading plan. Straddles can be risky due to the possibility of the market running up with a false move that fills one or both of the orders. This can cause frustration for the trader.
Nothing is perfect in the market, following momentum and staying on the ride side of the money flow can help you improve the odds.