GBPUSD—ready for a move?

The remainder of my short from 1.6236 yesterday stopped out a +5 pips overnight in trading that took the pair as high as 1.6276. We won’t have to worry about nose bleeds at that level. The weekly highs to date have been 1.6268/84. However, the pair did manage to crawl above its 200 daily SMA. Bully for it.

On the three-hour chart, the current pattern looks corrective to me within the large, sideways pattern and I wouldn’t be surprised to see a move down to the bottom of that pattern at 1.6094 (the low on Tuesday). This is why I just shorted again at 1.6246. A tight stop is mandatory because the market will tell me soon enough if I’m wrong. If so, I may reverse depending on price action.

Support is at:

1.6214 (200 SMA on daily chart; 1/26 low)
1.6108/28 (recent lows)
1.6070/78 (up trend line from late March 2009; recent low)
1.5914 (polarity)

Resistance is at:

1.6300/1.6400 (round number)
1.6461 (January high)



© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.