GBPUSD—rallying

I woke up in the middle of the night because of armadillos rooting about the yard (they cause the security lights to come on.) Since I couldn't easily get back to sleep I checked the market and went long this pair at 1.4918 because of it seeming to have found support at a Fib confluence level (1.4874) and because RSI seemed to be basing as well. I've just taken partial profits at +140 pips.

This pair has been skanky lately (my long I attempted yesterday stopped at -20 pips which will go to June results).

As to resistance…well first it has to get above 1.5129. It has cleared a recent, very short-term downtrend line at 1.5061. 1.5338 is a downtrend line on the weekly chart. Sellers are most likely coming in now, encouraged by the weakness over the last couple of days. As I've previously mentioned, the 20 EMA capped it the weeks of 4/16, 4/30 and last week. Today that EMA is at 1.5055 and is obviously proving to be formidable resistance. Should the pair falter, support is at 1.4874, 1.4710, 1.4696, 1.4590 and 1.4550.

Let's see how it behaves in the next couple of hours especially as it returns to the downtrend line it recently cleared. 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.