ANALYSIS PRIOR TO BOE RATE STATEMENT
On the 13th September (Wednesday), one day before the BoE Rate Statement, we had our Alpha Play Weekly Traders Meetup where we shared our analysis and insights on the UK Pound (GBP); and how we are preparing to trade the BoE Rate Statement.
Below is a summary of our analysis before the Rate Statement, and the results after the Rate Statement.
Going into the BoE Rate Statement, based on our analysis, we remain bullish on the GBP with the following pairs providing us with good trading setups:
*To protect our traders’ interest, not all pairs and details will be discussed in this post.
Since May 2017, we have seen price fell in a 5-wave structure. According to Elliott Wave Principle, we will be expecting a retracement or a potential reversal after the completion of a 5-wave structure.
In addition, price action has been ‘crawling’ down since mid July 2017, with a divergence forming. All these gave us the confidence and confluence that there is a very high probability of seeing a retracement or reversal to the upside.
This setup was more direct as compared to the setup on GBPCAD. Price has recently broke above the downtrend structure mid September with an impulsive move to the upside. This gave us a bullish directional bias on GBPAUD.
Following the impulse move, we saw a minor corrective move prior to the BoE Rate Statement. Though minor, there was a clear 3-wave structure within this corrective move, thus giving us the confidence in taking a long setup trading the BoE Rate Statement on Thursday.
GBP MOVEMENT AFTER BOE RATE STATEMENT
A thank you note from our student Edwin who caught an easy 130 pips from the market too!
Trading and profiting from the currency market can be kept simple and easy once you understand the various potential scenarios in the market, and how price develops.