GBPUSD—struggling

I'm still long from 1.4918 on which I've taken partial profits at +203 pips. Early this morning I added another long at 1.5094 and have moved the stop to breakeven. The pair has been struggling since yesterday morning, retracing all of yesterday's move up. The double top of 1.5230/27 was actually confirmed earlier this morning at 1.5081. However it hasn't yet followed through to the downside. It's possible the low was the bottom of an ABC correction.

The key weekly 20EMA is at 1.5075 this morning so the pair is managing to hover just above it. If that breaks, I'd be suspicious of any further upward movement and would more than likely close my longs and possibly reverse. The reason that EMA is so significant is that it capped the pair the weeks of 4/16, 4/30 and 6/25. In addition, before last week, price had not been above it since early February and hadn't closed above it since mid-January.

Resistance is at 1.5374, 1.5523 and 1.5816. Support is at 1.5079, 1.4874, 1.4710, 1.4696, 1.4590 and 1.4550.

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.