GBP/USD for the 7 hour trade remained below 1.2618. Automatic is known shorts apply but we also have day trades where GBP/USD 64 pips applies as an equal chance to rise or fall by 64. A more sophisticated view to understand and prove what equal chance means or 50 / 50 to longs and shorts is to apply Kurtosis.
The price path above 1.2618 factors Kurtosis at 1.68 and 1.54 to downside prices. On a scale of 0.0 to 3.0, the point at 1.5 is dead center. Equal chance is now mathematically perfect. But all price levels from bottom to top factors 2.06. Shorts reign under 2.06 as 2.06 is top heavy against 3.0.
When I say much has changed with 2016 interest rate changes, the changes were dramatic. Before 2016, Kurtosis truly applied to upside and downside prices so trade decisions were automatically known immediately.
To use Kurtosis correctly, the trade levels must be perfect or the readings will reveal wrong answers and trades will lose money.
Much easier and less time consuming is to trade GBP/USD Vs DXY.
Bottom and Upper targets: The beauty of a rare break above upper target or below Bottom is free money to trades as the price must by Mathematical certainty trade back to and below upper target and back to and above bottoms.
GBP/USD today pulled off a nasty move by break below 1.2554 at day trade end at 9.30 am and 10:00 am. But view DXY tops and the break is explained as DXY traded to tops.
Long Short Line 1.2618
Most Important 1.2570 and 1.2609 Vs
1.2626, 1.2634, 1.2642, 1.2650, 1.2667, 1.2674, 1.2682
Bottom 1.2554 achieves by 1.2570 and 1.2586
Upper Target 1.2682
Continuation Fail 1.2650
Long short line 101.67
Most Important 101.28 and 101.60 Vs 101.73, 101.79, 101.85, 101.92, 102.05, 102.11, 102.18
Bottom 101.16 achieves by 101.28 and 101.41.
Upper target 102.18
Continuation fail 101.92.
GBP/USD Vs DXY
At the 9:30 point, DXY broke above 101.92 and traded to tops at 102.15 while GBP/USD broke bottom at 1.2554 at the 9:30 hour and traded to 1.2507.
At 10:00 am EST, the ECB inserts its own price and this price from 10 am dominates and a new trade must factor. Today’s GBP/USD at 10:00 am is 1.2613 and longs above. The trade is good for 1 hour then comes BOE at 11:00 am, Canada at 12 noon, and Fed at 12:30.
See why get out by 9 and 10:00 am as profits should ‘ve been earned already.