Trade of the Week: long GBP/USD
Since GBP/USD seems to have found support around the 200-day simple moving average we would like to go long the cross with an upside target at $1.2705 and a stop-loss at $1.2405.
(Video Transcript)
Trade of the Week
Hello and welcome to Trade of the Week on Monday, the 11th of September.
A couple of weeks ago, we went long Robusta coffee and as you can see here on this Daily Financial Bet we did so around $2.420 and then we had a nice uptrend here and either you cashed in your profits on this trade or, because we moved our take profit level to break even, you got out with no loss on this one. So that one is done now.
OJ futures
And then last week I wanted to go short orange juice futures because we failed marginally below the previous all-time high at $332.67 on this Daily Financial Bet. So we are still short on this one, but are getting close to our stop-loss at the moment. So we're short around $320 with a stop-loss, on a daily chart closing basis I might add, at $332.70. So that one is still ongoing.
GBP/USD
And for this week's Trade of the Week, what I would like to do is to go long the British pound against the US dollar. And this has to do with the fact that we've had eight consecutive weeks of the US dollar strengthening. That is the longest winning streak we've seen since 2014.
And here, with regard to the British pound, you can see that we found support just above the red line here, the 200-day simple moving average and we are starting to turn upwards now.
So from a risk/reward point of view, yes, we are still in a downtrend, but perhaps if we have a tight stop, we might get a bounce back towards the late August highs around the $1.2700 mark over the next few days.
So this week's Trade of the Week is to go long GBP/USD and to do so around $1.2505 with a stop-loss at around $1.2405, risking 100 pips, and an upside target of around $1.2705 and a potential gain of 200 pips.
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