GBPUSD—weekly chart

My short position in this pair from 1.5871 profit-stopped out last week at 1.5771 (+100 pips). I had a sell order in at 1.5827 which narrowly missed being executed. I was busy with other pairs so I didn't track GBPUSD as closely as I could have. I was a little surprised this morning to see that, except for the weekly chart I posted last Monday, I haven't made a more detailed post about this pair since Feb. 10.

The weekly chart shows the pair in a clear downtrend—lower highs and lower lows—but also near the bottom of a broad channel. The weekly candle that just completed is a star. If this week closes well into the week before last then it will be a morning star and one could expect this pair to head up again. In general, stars represent a stalemate between the buyers and sellers and it's a warning of a trend reversal. The low last week was 1.5348, near the high of May, 2009. This could be expected to serve as support so the star formation could be more significant. In addition it could be wave iii of a third wave. It will be important to track price action this week but all of this points to a possible rally. I just took a small long position at 1.5494

Resistance:

1.5564
1.5675/5700
1.5775
1.5816

Support

1.5448
1.5400
1.5348/60

Here's the weekly 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.