GBPUSD—near short-term uptrend line

Cable is still hanging about its short-term uptrend line from June. Today's low so far is 1.5610; the line is at 1.5596. I did short yesterday at 1.5679 but was stopped at breakeven last night. Whatever one wants to say about this pair it's not easily giving in to downtrend pressures.

This morning I backed way up and looked more closely at the interim price swings in this pair, examining each one for momentum, degree of retracement, etc. Obviously, from the low of 1.4228, the pair is making higher highs and higher lows. It's true, as I wrote yesterday that the RSI dropped below its uptrend line. However price hasn't yet followed. Until it does, I can't completely throw my hat in the ring with the bears. In addition, the internal wave structure is strong for the up moves and corrective in the down moves. It's probable that, unless price starts to dip more clearly, I'll try a small long in Cable. The most realistic price objective is 1.5703 where it faltered yesterday. If it can make it through that then a target of 1.5998 is a possibility. That's the Aug 6th high and the .618 retracement of the drop from the July 30th high. Should price drop, support is at 1.5596, 1.5533, 1.5497/72 (200 daily SMA and price support) and 1.5443.

Here's the daily 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.