GBPUSD—broadening on hourly

I went long early yesterday at 1.5138. The pair climbed after the non-news of the FOMC and reached a high of 1.5337 this morning. It developed a broadening pattern which after a rise can be deadly. While one can make the case for additional gains, I wrote last Friday that the pennant pattern had a potential target of 1.5316 which was near the 2/26 high of 1.5323. That's why I just took partial profits at +170 pips.

The BOE just released its minutes containing the statement, "Some members considered the upside risks to inflation had increased slightly over the month; others felt that the balance of risks had not changed materially." Now there's a statement. They can't decide what the situation is. This, of course, should explain to anyone why the GBPUSD shot to the upside, right?

Support is at 1.5277, 1.5210, 1.5174, and 1.4978. Resistance is at 1.5341 (where it is now at 5:45 AM EST), 1.5520, 1.5415, and 1.5816.

Here's the hourly 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.