GBPUSD—bounce continues

The pair was gobsmacked by 1.5045 this morning which also happens to be the 10-day SMA of 1.5048. Combined with the fact that 1.5055 served as resistance yesterday, it's not surprising it dropped back to a low of 1.4901 so far. Shorts may be piling in but I'm still long with two positions, one from 1.4774 and one from 1.4815. (I had a second position yesterday from 1.4828 but it stopped at breakeven and I reestablished a bit lower). I just took partial profits on the one from 1.4774 at +151 pips.

For now cable should stay above the 1.4476 doji low from last Friday. Above 1.4720/50 things look cautiously positive. 1.4721 was the low of a doji on the three-hour chart yesterday. While sellers will probably come in with a third attempt at 1.5045/55, it's possible it can break through. Repeated attacks on a price level often are eventually successful. Not always, though. But it the pair does break above that, then resistance is at 1.5107, 1.5247/63, and 1.5391. One calculated price target is 1.5300 so sellers will probably enter there. Support is at 1.4900, 1.4845, 1.4765, 1.4750/20 (Fib confluence zone), 1.4650, 1.4598, 1.4476, and 1.4389/67.

Here's the one-horu 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.