First Entry in GBP Following the UK Brexit

GBP Trading Strategy

After successfully predicting the Brexit we have been avoiding GBP pairs and crosses in the Forex market. Many traders still have their positions hedged, which is limiting the trading activity in the Sterling. At the time of this writing it appears the UK will not commence its negotiations with the European Union (EU) until October, 2016. The leading credit rating agencies have downgraded the UK AAA rating following its decision to leave the EU. The Bank of England (BOW) is expected to slash rates and possibly initiate a fresh round of QE.  As we have emailed in the past, we are not convinced these measures will weaken GBP as they are aimed to restore confidence.

Although the BOE meeting is only due next week, the UK is already preparing to slash corporate tax from 20% to 15% (possibly lower) to attract investments in the UK. We are also aware the Swiss National Bank (SNB) may re-initiate the floor to prevent a potential crisis that may emerge as the negotiations between the UK and EU begin. Once article 50 (A50) is activated and the negotiations begin the market may be subject to extraordinary volatility.

GBPCHF Weekly Chart

Please click on the chart to enlarge:

GBPCHF Weekly Chart 04/07/16

GBPCHF Weekly Chart 04/07/16

We will begin by highlighting we are deviating from the chart. There is no concrete entry present on the weekly chart and there is unlikely to be one for some time. Our only indication is the positive divergence that is painted across a number of indicators. The medium-term outlook is still bearish (unless the SNB intervenes) but corrective gains may materialize as part of the established downtrend. These corrective gains may range between 450 – 500 pips.

It is a fairly risky maneuver as there is no concrete entry. If GBP will correct higher this week we may be unable to enter as it will require a larger stop, depending on the corrective gains.

GBPCHF Trade Alert

GBPCHF long at market price (1.2893)
Take profit: 1.3300
Protective stop: 1.2739
Risk Ratio (RR): 1 : 2.6 (approx.)
Estimated duration: 14 days

06/07/16 UPDATE: GBPCHF triggered the protective stop loss order, ending the trade with a loss. The selling was triggered as 2 UK hedge funds suspended withdrawals.

EURCHF Trade Alert

EURCHF is a daily entry. The price has tested a potential support level, which we are attempting to capitalize on. The latter support levels are seen at 1.0790 and 1.0755. We are layering the stop below 1.0755. The target is approximately +300 pips, however, we are using a higher target should the SNB re-initiate the floor.

Please click on the chart to enlarge:

EURCHF Daily Chart 05/07/16

EURCHF Daily Chart 05/07/16

EURCHF long at market price (1.0816)
Take profit: 1.1500
Protective stop: 1.0739
Risk Ratio (RR): 1: 7 (approx.)
Estimated duration: 30 days

11/07/16 UPDATE: EURCHF is trading at 1.0867 at the time of this writing. We are closing 20% of the long trade at market price and shift the protective stop to 1.0820.

12/07/16 UPDATE: EURCHF is trading at 1.0934 at the time of this writing.

Please click on the chart to enlarge:

EURCHF Daily Chart 12/07/16

EURCHF Daily Chart 12/07/16

We are closing 20% of the long trade at market price and shift the protective stop to 1.0845.

13/07/16 UPDATE: EURCHF is trading at 1.0925 at the time of this writing. We are closing 20% of the long trade at market price and shift the protective stop to 1.0880.

14/07/16 UPDATE: EURCHF triggered the protective stop by a fraction of a pip, ending the trade with a decent profit. Some traders may still be in as it is a fraction of a pip, please manage the trade in accordance.

First Entry in GBP Following the UK Brexit

As EURCHF long trade is closed this page can now be accessed by all traders. Open trades and relevant intraday strategies are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
First Entry in GBP Following the UK Brexit

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First Entry in GBP Following the UK Brexit

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First Entry in GBP Following the UK Brexit

Last Updated on July 28, 2016