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Coleman: Why I'm buying sterling dollar
With volatile movement in the US Dollar Index, Ian Coleman from First 4 Trading is expecting the dollar’s bearish bias to translate into cable. As a result he's planning to buy sterling dollar.
Ian says there was a rejection of gains in the US Dollar Index chart at the 50 percent pullback level since the last sell-off; creating a bearish bias. This will most likely impact sterling dollar, where previously there has been little movement.
He explains a descending wedge formation has formed in the currency pair, which Ian is anticipating will break to the upside. He's looking to buy on a dip close to the wedge pattern’s base or buy on a break of the wedge formation. Ian is looking to buy a dip at 1.6515 and a break at 1.6590, with a stop placed at 35 pips from entry.
His targets for the trade are: 1.6580, 1.6625, and 16663 with the last two targets being relevant for buying on a break.
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01:34 minutes
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