GBPUSD—dropping

Cable took out my long for +27 pips during its drop. The low so far this morning has been 1.5714. The pair may be setting up for some sideways movement at best. At worst, further drops could be ahead, particularly if price drops below the short-term uptrend line. RSI has already penetrated its uptrend line.

There's risk aversion in the air with the BOJ decision, concerns about China growth and the upcoming Fed policy statement today.

Support is at 1.5696, 1.5552, 1.5530, 1.5493 (the uptrend line on the three-hour chart), and 1.5443.
Resistance is at 1.5800, 1.5828, 1.5928, 1.5958, 1.6000, 1.6070 (Feb. 2010 high), and 1.6276 (Jan. 2010 high).

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.