GBPUSD—weekly

I never get a chance to write in this blog as much as I'd like but each weekend I run weekly charts and analyze the daily action for the week past and project what could happen in the week coming up based on the weekly close. This takes a while as there are many analytical approaches to use. I always intend to post these but, as I said, there never seems to be time to do so.

In any case, here's the weekly chart for the GBPUSD that I ran on Saturday. There are a couple of things about it that caught my attention immediately.

First, for the second week in a row, a doji appeared. The long lower shadow hints that lower prices are being rejected and since this was happening near a support area my general "opinion" from this was that there might be a bounce this week. In addition, the close for the week was higher than the close the week before. Thus, I would be predisposed to going long should the opportunity present itself as long as nothing on the shorter term charts looked ominous. This is partly why I went long yesterday.

The second thing that caught my attention was that the RSI readings didn't drop into oversold on the weekly chart. This is not a signal in and of itself. But it seems to indicate that there's enough buyers coming in to keep the pair from plunging.

Unfortunately, on the weekly and daily chart, this pair is in an overall downtrend. So while buying opportunities may present themselves, one needs to be careful.

If you're actually trading off the weekly chart (and I know few day traders who do), your stops must be wider (i.e. below the recent lows of 1.4783 or 1.4872) but of course the potential resistance and price targets are higher. For example, you could use such weekly highs as 1.5822 or 1.6460

Here's the weekly chart printed as of this past Saturday. Were you to look at one printed off today, you'd see a third candle shaping up with a long lower shadow. This won't be confirmed until the close Friday but it suggests that the pair is hammering out a base at the recent lows.
















© 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.