Sharp up and down moves on Brexit headlines
The GBPUSD has been on a "Mr. Toad's Wild Ride" today as Brexit headlines has led to quick swings. That has the potential to snatch defeat from the jaws of victory and have traders feeling they are off the rhythm with the ups and downs in the market. It ain't easy.
Looking at the hourly chart, the initial high today took out the high from yesterday at 1.29422, but then tumbled all the way down to 1.2818. That move lower did take out its 100 hour moving average (blue line), but did stall within a wide swing area between the 1.2800 level and the 1.28215 level (See red numbered circles, and lower yellow area).
If you were lucky and patient, buying in that area led to a lucky break to the upside on additional Brexit headlines. The highs for the day were taken out and the price moved up to 1.2978 where another headline as taken the pair back down toward another swing area between 1.2892 and 1.2902. The 50% of the days trading range is within that area. Can the support area now hold?
When headlines from external events that are randomly interspersed within a trading day play a influence, it requires care and a bit of luck. It also likely leads to being a little bit more conservative when you do get lucky (i.e. you need to take profits).
It ain't easy. You always have an option to sit out. However if you're in it, be patient. Wait for your levels but have a finger on the button and be prepared to accept a headline that may go against what you hoped. If you are lucky, be grateful and look to book some profits.
