GBPUSD—still struggling

I wrote yesterday that GBPUSD was struggling with 1.5979. It cleared that and has climbed as high as 1.6079 today where it’s encountering more resistance. The climb on the three-hour chart looks raggedy to me and the most recently completed candle is a doji after a rise so it’s a bearish. The pair needs a close above this doji. That, with the Monday hammer and the bullish candle from yesterday, might suggest more upside before another drop. I’m still short from 1.6246. I closed the other position, from 1.6132, at 1.5995 for + 137 pips.

The potential evening start forming on the three-hour chart might cause me to add a short position. It’s potential because the third candle hasn’t yet completed.

Resistance:

1.6100/06/17 (round number, up trend line from 3/09, and 20 daily EMA)
1.6225/38/50 (polarity, .382 retracement of move down from Nov.)
1.6365/69 (polarity, 50% retracement from Nov. move down)
1.6461 (Jan. high)

Support:

1.5851 (Jan. low)
1.5833 (Dec. low)
1.5708 (Oct. low)

Here’s the three-hour chart:



© 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.