The GBP/USD pair went back and forth during the session on Tuesday, but formed a shooting star like candle for the third day in a row. In fact, the 1.51 level seems to be mightily resistive, and I think the markets really going to struggle to go higher from here. It makes sense, as the trend is most certainly to the downside, and as a result I really like the look of shorting this pair now.
As a general rule, it's always easiest to follow the trend. By trading with the trend, you can become a little bit more lax in your trade setups, as the totality of the markets momentum should work in your favor. This isn't to say that you should be sloppy about entries, but when you see a set up like this, sometimes it's okay to take it simply because it seems to be so right.
Remember, the most obvious setups are seen by everybody. This is exactly what you want, as there is no "mystery" to the markets. You are not going to find something that nobody else in the world sees and suddenly follows for no apparent reason, so if that is what you're looking for, you are going to struggle. Unfortunately, there are plenty of people out there who have embedded this into the brains of Forex traders. You need other traders to push your trade along in order to make money. One of the dumbest statements that you'll here in the Forex world is "Never follow the herd." It's the herds that pushes the trading your direction.
1.53
I believe that the gap above current levels offers resistance all the way to the 1.53 handle, and as a result I think there is a bit of a cushion for the sellers at this point. Looking at this chart, you can recognize that the 1.50 level is a large round psychologically significant number, but in reality it has already been pierced, and as a result it should hold up quite as well as it did a couple of weeks ago. I will be selling rallies, and I will be selling a break of the bottom of the Tuesday range.
