Can GBPUSD overcome its current resistance? On the weekly chart, there is a short-term downtrend line coming in from 1.6879 that had its second touch last week. The prior high is 1.6600; the high this morning was 1.6581.
I bought yesterday at 1.6457 based on the low of 1.6432 being near the .382 retracement of 1.6166/1.6600, the weekly pivot being at 1.6425, a prior breakout point at 1.6428, and the pair being near the bottom of a flag pattern on the three-hour chart. Obviously, I've locked in some profits and my stop is above breakeven.
The pair is down to a low of 1.6545 so far. This is near weak support at 1.6553/49. Additional support is at 1.6504, the breakout point of the flag pattern. If things look OK as to momentum and price if it returns there, I may add to my position. Beneath this is 1.6428/17.
I have price targets to 1.6953, 1.7045 and 1.7140 should the pair start to boogey.
© Dianne Fecteau, 2011. 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.