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GBP/USD Technical Analysis & Top Forex Trading Setups!

hey guys what's going on welcome back to

another video today we're going to be

taking a look at the pound dollar it is

september 28 2020 so we've got some

ideas here

uh that i want to talk about yesterday

we talked about this one briefly on the

sunday special where i just talk about

my technical analysis outlook for the

week but so far this week we've already

had some really interesting

things start to happen on the pound so

let's talk about some trading

setups that i personally see a little

bit more in detail on

the pound this week so again we saw

briefly yesterday

uh on the the video that i put out some

ideas

but i'm gonna go a little bit more in

depth

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so let's talk about the pound here and

why right now i am still bullish on

gbp usd now there's a couple main

factors here

um and the big thing that i'm going to

talk about is in fact the fact that this

is trading against the u.s dollar so

when we have something like

gbp usd

right we are looking against uh the the

u.s dollar to

gauge the pound which is important

because the us dollar recently has been

on a very strong overall downtrend now

recently we have had

the dollar gain some value right you can

actually see the pound coming down

relatively which means

um you know the opposite so typically

when the u.s dollar is coming down

the pound might be rising on this chart

right and then

vice versa if the pound starts getting

weak the u.s dollar relatively would be

considered stronger so we have to think

of these two

in correlation because when we are

trading forex we are trading two

currencies at any given time when we are

using a currency pair

so what's been going on with the us

dollar well uh the us dollar and the u.s

economy just like a lot of the world

right now

is under a lot of pressure so when we

look at the u.s dollar

uh we have a lot of problems we have a

lot of unemployment we still have

some really really big damage due to the

whole pandemic situation

so that's global though because so does

the pound right but the us dollar has

printed a tremendous amount of money

they printed the most money by far uh in

around the world to try and uh ease the

problems with

this whole situation so with that said

that has been a very very bearish case

for the us dollar

in the last several months a lot of

people have been very very bearish

thinking that okay they're printing so

much money and what happens when you

print a lot of money well it devalues

the currency right

so if we actually before we jump into

the pound here if we take a look at dxy

this is the us dollar

index and you can actually see that we

have been

on a rise here we have broken from a

downturn we talked about this

recently but the idea here is that long

term we still have to be aware

that this 200 period moving average is

still bearish we still have a lot of

reasoning for this long-term downtrend

to potentially continue

overall now granted we do have what

looks like a pretty technical

a pretty good technical bounce here so

i've actually highlighted my analysis

from this morning you can see here is

some resistance that we've broken

through

we also were in a downtrend using this

trendline that got broken out

and now things are actually looking

short-term bullish so

my opinion here is short-term bullish

on the us dollar but longer term i still

think things are bearish because we do

have some serious problems

with the ginormous printing of money and

then we can go take a look at the pound

relatively and see well how could we

potentially trade that

so again looking at the us dollar

specifically the dxy

the us dollar index right we can see we

have started to form a higher low we've

broken through some resistance things

look to me

short term bullish here on the pound now

to keep that in perspective if we do

continue to bounce up

we've got some key resistance again that

200 period moving average but also we've

got some technical zones that we can

keep an eye on

now if you don't trade with the dxy

or you don't look at it i definitely

think it's worth looking at because it

does give you an overall picture of what

the us

dollar is doing so if you trade things

like

usd cad usd swiss dollar yen or pound

dollar your

euro dollar aussie dollar right those

relate to or

you know they depend on what the us

dollar is going to be doing for part of

their movement

so we want to keep an eye on the us

dollar for any of those sort of crosses

in my opinion

so with that said let's hop back over to

gbp usd for a moment

and we will see if we can talk about

some trading setups now

again one thing i want to point out that

we talked about yesterday on the video

was that we actually got a beautiful

bounce as we were hoping for off of that

200-day

moving average now that to me is very

bullish and actually could be

a good sign for the pound and maybe even

mean that the pound will actually

still do alright even if the us dollar

index

does continue to move higher so

let's also highlight what we talked

about yesterday just a bit

we can actually get this uh this same

zone going that we talked about

yesterday so you can see

this zone that we highlighted did in

fact hold very nicely in fact yesterday

we talked about a few

major things here on this zone so let me

point them out and we'll get a recap of

the technicals here so we've got that

resistance zone that now

looks like it wants to hold at support

it has done so so far that

is uh part number one okay part number

two here that we talked about yesterday

in the video was this 200-day

moving average which to me is a very

bullish indication if price can hold

that or is trading above it it's usually

a bullish

market if things are underneath it it is

usually longer term bearish right

so with that said uh that's our second

point but there's also

a third point here uh that i can draw in

using a trend line you can see we've got

a nice little upward trend there uh on

the pound so to me

there's a lot of technical reasoning

here uh for potential long opportunities

now

so when we're looking at this how do we

actually take advantage of this it seems

like the train has already left the

station which i guess if you were

looking for this particular setup

it sort of already has there may be a

retest and that might be worth looking

at

for potential longs but i am going to be

using this a little bit

shorter term so if i'm looking for a

break to the upside here

let's remember our analysis here on the

daily chart and let's go ahead and bring

it down to something like the one hour

chart

so this is a little bit shorter term

than the daily chart but the idea here

is that okay we know that this zone and

this trend line has held bullishly on

the higher time frames

that could give us some nice structure

to trade on those shorter time frames so

we know the higher time frame

is doing uh you know is looking pretty

bullish at this zone at least according

to my own analysis

right so if we were to use that

information to our advantage and maybe

look for opportunities to get long

we can start taking a look at some other

technical factors such as this one

where we've got this downward trend line

this is the uh a shorter term

counter trend right because we've got

bears here on the shorter time frames

but on the longer time frames

we've got some bowls that may be ready

to move this market so with that said

we've used the higher time frame and now

maybe there's something like a

break and retest setup that actually

could have a little bit more steam

since we are trading off of those higher

time frames and hoping that

we're not hoping but we're we're

strategizing that there's a pretty good

chance that those higher time frames

could follow through we could see some

some bulls push this market higher so

how could we trade that so

now we've used the higher time frames

we've looked at the big picture the

macro and and potentially

or even considered some of the

fundamentals right um then

we've looked at the the the time frames

that are higher the daily chart and you

could even look at the four hour chart

and then bringing it down to those lower

time frames if you want to execute

shorter term trades

so uh that could lead us into something

like this and this is a trade setup that

i personally like

right now so if we were to break above

this level right if we were to get

bullish

and show some nice confirmation above

hold that level the retest could

actually be a nice

opportunity in my opinion for the

continuation

right so break re-test and go long i

like that setup personally with a

managed risk

um you know risking only one percent or

so two percent

max in my own view to potentially

capture some of that upside so that's

one scenario of how i like to trade this

now

i do want to also offer the the counter

idea

if things were to change directions so

and sometimes people give me a hard time

in my videos they say oh nick you just

analyze both directions so you're always

right but i could be wrong

either way it depends how you manage

your trade where you put your stop how

you

you know execute the trade if you decide

to take it that sort of thing

so i like to actually analyze both

potential directions

so if we're wrong about this if this

higher time frame does not hold and we

do in fact start breaking bearish

there might be some other ideas to

consider on the pound

so we talked about this major zone right

here right where we have

supportive structure we have the sma the

200 sma which to me is a significant

longer term indicator of the trend

and we have this upward trend line but

if this breaks if we do actually get a

lot of us dollar strength

right that could push the pound dollar

lower right because remember

we're trading the gbp usd so if the us

dollar gets very strong

that could leave the pound weak and push

price lower

so in that case there might actually be

a flip side uh

perspective to look at so if price were

to get bearish in this case

right we could actually look for

opportunities there as well so if we

were to break for me the big one being

underneath that 200 day close

significantly under it

and break through this supportive

structure and break through

the trend line right there might be

opportunities to look for retests to go

short now that is not the current

situation and not what i think is going

to happen but if it does start to happen

it would be worth adjusting to so in

that case

right there might be a perspective of a

short bias that could actually develop

if we were to see the break of some of

that structure

you know maybe you put something above

structure there just as an

example right and let's say we went for

something like a two to one actually

like that a lot because it brings us

down to

kind of this structure area here right

and that could actually be a decent

setup as well if things started to get

short so if price came down underneath

if we broke through

that bullish structure and we see a

retest there

i like the idea that gives me a pretty

decent risk to reward looking for

the downtrend to continue down to this

this level here so that's the bearish

side

if things decide to get bearish because

we never know exactly what the market's

going to do

all we can do is react accordingly and

set up trades that give us

a good risk to reward and let us

potentially capture

more upside than the downside that we

set up so

that is my opinion there on the pound

overall again

mostly bullish right now but if things

were to flip i would be willing to

start to look for setups on the bearish

side i don't like to commit

100 to one direction i like to go with

the flow go with the momentum of what

the market is actually doing rather than

try and

force my will on the market if you will

so uh thank you guys so much for

watching i hope you got something out of

it make sure to like the video down

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see you back in the next video

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