GBPUSD—resistance

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.

GBPUSD—April seasonally strong

If you look at the monthly chart below, you can see that April tends to be an up month for Cable. I've marked the years above the April candle. This chart begins in 2001 so it is only nine years of data but the pattern goes back further than 2001. Think about it only as something of which to be aware.

Cable is still below the downtrend drawn from 2009. However, the pair broke above a long-term downtrend line from Nov. 2007 in February, closed below it in March and is above it again as of today. The pair needs to close above 1.6401 for this break to gain credibility.

Note the symmetrical triangle. These can be continuation patterns. From an Elliott perspective, they always are continuation patterns that occur in a fourth wave. If this is true, the width of the triangle is the price target for wave five. This would be 3,542 pips (1.3503 to 1.7045). It seems a bit much to contemplate at this point—way down in the 1.11 area.

If, instead of a triangle, one wants to look at this as an ABC correction, then wave C at .618 A would be 1.6400. Other approaches strengthen this resistance. The .382 retracement of the 2.1164/1.3503 decline is at 1.6430 and 1.6410 is R3 of the weekly pivot.

Above 1.6430/1.6500 would strengthen the case for a move to much higher prices. The August 2009 price high is 1.7045. A daily flag target I blogged about March 19 had a target of 1.7215. If this is an ABC correction and wave C equals A, the target is 1.7725.

On the support side, 1.5345 is the most recent swing low. If one buys the Elliott triangle interpretation, leg D of the triangle would be 1.47 or so.

Here is the monthly chart:

© 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.

GBPUSD—broke candle low

The low so far is 1.6092 after a rally to slightly less than the .382 retracement of the move down from yesterday. The last completed hourly candle closed below the hammer low of 1.6136. This is bearish. If the pair retests the candle low of 1.6136 I may add to my short position.

© 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.

GBPUSD—Hourly divergence

On the hourly chart (not shown), there is positive divergence between price and RSI. In addition, the last closed hourly candle was a hammer. Both of those hint at a rally. Resistance is at 1.6197, 1.6235 (.382 retracement of the move down from yesterday), and 1.6267 (price high and 50% retracement). The hammer low was 1.6136. If Cable closes below that, it invalidates the hammer. At that point, I'd look for 1.6000.

© 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.

GBPUSD—weekly

Cable has fallen sharply to a low of 1.6136 this morning in the failure off the 1.6401 top yesterday. Looking at the move in the context of the weekly chart, one can see a symmetrical triangle with what looks like a corrective move off the 2009 low of 1.3503. There has been a series of three wave moves so far. While it has been tantalizing watching price nibble at the upper boundary, the probability is for a move back towards the triangle low at 1.4725.

Obviously, if it rallied and managed to take out the 1.6401, it would be significant. There still is a daily flag target of 1.7215. This is a valid target if one is bullish.

However, I'll confine this post to the downward potential. Three wave moves within a triangle from an Elliott perspective often relate by a Fibonacci number. These are close, but not spot on. The move from 1.7049 to 1.4229 was 80% of the move from the 1.3503 low. The move from 1.4229 to 1.6401 was 77% of the prior move.

Instead of discussing a triangle, one could also just assume an ABC correction where the C leg at 1.6420 was .618 of the A leg. This is close to where it failed yesterday.

On the way to 1.4725 Cable would find strong support at 1.6000. On the three-hour chart, this is the lower boundary of the channel I previously posted and 1.5982 was the last swing low on that chart. There, one could look at a long position but watch momentum and price behavior carefully.

I'm short this pair so I'll blog about it.

Here's the weekly chart:









© 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.

GBPUSD—failed at resistance

Cable failed yesterday at the 1.6400 resistance, a nice round number and just below the inverted head and shoulder (H&S) pattern with the price target of 1.6421 and the top of the channel at 1.6433. The remainder of my position was profit stopped out at 1.6297.

The low so far this morning is 1.6274, near the .382 retracement of the 1.6061/1.6400 move at 1.6269. There's a little room after that for the correction to continue. On the three-hour chart the RSI has broken its uptrend line but price has yet to follow. This uptrend line is at 1.6253. The .382 retracement of the 1.5985/1.6400 move is at 1.6241. Below this, the next support is at 1.6200/6196. Much below that would suggest to me that Cable is headed back to 1.6000. That would bring it back to the bottom of the channel on the three-hour chart I posted yesterday and potentially be a good entry point for a long position.

Should it rally, it has to overcome 1.6400. Potential price targets are then 1.6500, 1.6556, 1.6600 and 1.6638.

© 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.

GBPUSD—approaching resistance

On Saturday, I prepared the three-hour chart below to assist my analysis and potentially guide my trading for the week. My long had been taken out and I wanted to know if it was worth getting back in. One of the things the chart showed was an inverted head and shoulder (H&S) pattern with a potential price target of 1.6421. This, along with other analysis, gave me the reasons I needed to enter at 1.6276 yesterday. Cable moved up. This morning the high of 1.6400, allowing me to take partial profits.

Now, it's approaching resistance. The top of the channel is 1.6433. The profit target from the H&S was 1.6421. The current price is also parity. In addition, it's possible the pair is in a corrective move on longer-term charts (weekly and monthly) with targets up to 1.6465. If one isn't long, this isn't the time to jump in. Wait for a pullback. If the pair should scale this strong resistance, then potential price targets are 1.6500, 1.6556, 1.6600 and 1.6638.

Every individual trader should be doing some analysis on the weekend when the market is closed and there are no distractions. I prepared three or four different charts for Cable. Here's the one that indicates the H&S pattern:










© 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.

GBPUSD—weak

Cable managed to reach 1.6243 yesterday but has fallen again to a low of 1.6039 this morning in the general weakness that has prevailed over some of the currency pairs. My long from 1.6162 stopped out at breakeven.

The low today is uncomfortably close to the prior low of 1.6032. It's not that far away from key support at 1.5963. This is .382 retracement of the entire move from 1.5345, the Feb. 11 low, and confluence. 1.6028 is the rectangle's lower boundary (outlined in gray on the three-hour chart below) so it lends support.

If the pair can't halt its slide here, the next support is 1.5995 (daily 50 SMA and confluence), 1.5891, and 1.5751/25, the .618 retracement as well as below a long-term daily trend line. This would certainly support that the high of 1.6344 was the end of a monthly ABC correction.

If the pair can recover before slipping beneath 1.6032, then resistance is at 1.6198 and 1.6243. Beyond that, look for a rally, possibly making it to the 1.6367, the weekly resistance line or 1.6465, the price where wave C would equal A on the weekly ABC correction.

Here's the three-hour chart:












© 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.

GBPUSD—key support at 1.5963

After cable's March 2 high of 1.6344, the pair closed yesterday at 1.6159, below the 10- and 20-SMAs. This is the fourth, daily, lower close and the third day of lower highs. The high met long-term trend line resistance and was near the target for a monthly C wave at 1.6324. That, though, is if C is equal to .618 of the A wave so it is possible the pair is gearing up for another push upwards. I'm long from 1.6162.

A look at the weekly chart below shows that cable in the middle of an upward sloping rectangle. It is near a weekly resistance line at 1.6367 but if it can manage to push above this then it should be able to reach the top of the rectangle. The weekly ABC correction could have C ending at 1.6465 if C equals wave A (1.6192 was .618 of A).

As of now, the pair is well above key support. 1.5963 is the first key support level. This is .382 retracement of the entire move from 1.5345 and is the Feb. 11 low. Below 1.5751/25 would be very bearish as it would violate a long-term daily trend line and a prior low as well as be the .618 retracement from the move up from 1.5345.

Here's a weekly chart:










© 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.

GBPUSD—Monthly

Cable is nudging up against a long-term downtrend line from the end of 2007. It also appears to have broken above a triangle but this looks premature to me—it may be a fake-out.

I'm leaning towards regarding the monthly price action as an ABC correction. The C wave would be .618 of the A wave at 1.6324. The pair achieved 1.6330 yesterday so we'll see. The C wave would equal A at 1.7619 so there's plenty of time to get in on that train if indeed it looks as though it's going to happen.

Monthly support is at 1.6142, 1.5963, 1.5898, 1.5764, 1.5527, 1.5405, and 1.5345. Monthly resistance is at 1.6386, 1.6496, 1.6879, and 1.7045.

Here's the monthly chart:










© 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.

GBPUSD—approaching support

Cable hasn't closed beneath 1.61 since the 14th and its low has stayed above 1.61 since last Friday (although it was within two pips of it yesterday) so as it approaches the support of price and the two uptrend lines from January, I might look at a buy. The stop can be tight. The potential targets are 1.6276/83, 1.6300, and 1.6465.

A close below 1.6100 suggests support at 1.6033, 1.6008/00, 1.5965/44, 1.5832/10 and 1.5747.

Here's the three-hour chart:












© 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.

GBPUSD—dragonfly doji

The best Cable could do yesterday was 1.6163 which is better than it has done this morning with a high of 1.6101.

On the three-hour chart yesterday morning, a candle known as a dragonfly formed with a low of 1.6029. These candles with a long lower shadow and open and close prices the same (or as in this case one pip apart), often serve to define where support is. Thus, if Cable closes beneath this, it would be quite bearish.

Another thing to notice on the chart is the series of steps down. The pair has currently climbed back to retest the last one so let's see what happens but I'm leaning towards a sell. I'd like to see a momentum failure on the short-term chart, divergence or bearish candles.

Support is at 1.6029/00, 1.5900, 1.5751, 1.5345, and 1.5274/64 (fib confluence) as well as the round psychological number of 1.50.

Resistance is at 1.6300, 1.6461, 1.6500 and 1.6878

Here's the three-hour chart:












© 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.

GBPUSD—short-term

A reader emailed me to ask if I was short Cable since I commented in the last post that my money was on the bears. No, I'm not. In fact I'm studying the short-term charts now which look somewhat bullish. It's currently at short-term support of 1.6036.

What I should always remember to say in the weekly analysis is that this is longer term analysis. In the case of Cable, it is near the top of the triangle which would imply a short. Had I been on top of it when it was at 1.6163 overnight, I might have sold there.I wasn't and didn't. At this point, I need to see momentum fail on the short-term chart or a retest of 1.6150 or thereabouts with failing momentum or divergence or bearish candles.

© 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.

GBPUSD—weekly

Cable has managed six days of closes over 1.60 and it looks as though the bulls are fixated on overtaking 1.6300. What can't be overlooked, however, is that it's coiling inside a triangle on the weekly chart and the lower boundary, a logical target for the next move, is 1.4619 or thereabouts. Before it got there it would find support at 1.5900, 1.5751, 1.5345, and 1.5274/64 (fib confluence) as well as the round psychological number of 1.50. Of course, an Elliott Wave afficianado would say the pair must break down from this triangle since it entered it in a downtrend but take that with a grain of salt.

The fib confluence of 1.5274/64 lends support to the idea that Cable might be settling into a trading range between 1.5297 and 1.6300. This, too, would suggest the next move would be down. Everyone has eyes on resistance of 1.6300. If price fails again in this range, selling will come into play.

If price does successfully overtake and settle above 1.6300, then 1.6461/1.6500 and 1.6878 come into play. My money is on the bears but be careful with this pair and use tight stops.

Here's a weekly chart:











© 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.

GBPUSD—weaker

Cable is hanging around just below confluence. A break below 1.5880 and then 1.5853 would signal that it can't carry another advance into the 1.6000 region. The pair needs to get above 1.6059 to hint at a bullish uptrend and higher highs.

© 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.

GBPUSD—another surge

I'm still long from 1.5419.

On the strong fundamental news, the pair surged through 1.60 this morning, only to be turned back by 1.6059. With that high Cable gained 249 pips since Friday's close which is 60% of the 414 pips it gained last week. And it's only Tuesday morning. A pullback should happen at some point and I will probably add to my long position. Negative divergence persists on the three-hour chart. However, it's possible for the pair to get to 163.00/40 before that happens.

A .382 of the current move would be 1.5780, very close to other support and a buy would be in order here.

If the pair peaks with the 1.6059 and begins to drop, it makes the head and shoulder pattern more likely which I wrote about yesterday. There's a bearish engulfing candle from November's monthly chart with the high of 1.6302. If the pair definitively closes above that, the candle is invalidated.

Support is at 1.5912, 1.5810. 1.5780, 1.5740/10 (prior resistance and uptrend line from last week's move), and 1.5686/51 (fibo of most recent move up, daily 10 SMA, and strong prior resistance). Below that is a strong range from 1.5567 to 1.5506 made up of fib confluence, moving averages, and price.

Resistance is at 1.6100, 1.6228, 1.6302 (the November high which was also the top of a monthly bearish engulfing candle), 1.6300 and 1.6348.

© 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.

GBPUSD--resistance

Last week was a great week for Cable longs. The pair moved from a low of 1.5475 to 1.5889 in above average volatility. It overcame strong resistance at 1.5651.

As of Thursday evening I was holding three long positions from 1.5419, 1.5602, and 1.5750 respectively. I closed out the latter two on Friday afternoon for 1.5865 and 1.5827 for a total of +340 pips. Even though I wrote on Thursday that there was little in the way of the pair moving to 1.5912, the weekly high on Friday of 1.5889 was very close and I wanted to book profits. I still have my long from 1.5419 and may close it as well. I can always come back in on a retracement.

This morning the pair has touched a high of 1.5915 in the last hour. There is negative divergence on the three hour chart. After its strong rise last week, a pullback would help the pair get more energy (if there's any to be gotten) and then it could try again for 1.6000, a big psychological number. 1.60 would also be an interesting peak from a weekly point of view in that there's a potential head and shoulders pattern with the head at 1.6302 (the top of the bearish engulfing candle from November) and the neck at 1.5295 (September low).

Resistance is at I have a price target of 1.6100 coming from a three-hour point and figure chart. The downtrend line on the weekly chart is coming in at 1.6228. So resistance is 1.5912 (prior high), 1.5960, 1.6000, 1.6100, 1.6228 (weekly downtrend line), and 1.6300 (the November high which was also the top of a monthly bearish engulfing candle.)

Support is at 1.5810. 1.5740/10 (prior resistance and uptrend line from last week's move), 1.5686/51 (fibo of most recent move up, daily 10 SMA, and strong prior resistance). Below that is a strong range from 1.5567 to 1.5506 made up of fib confluence, moving averages, and price.

So the potential is there for strong moves in either direction. Watch for signs of faltering as it moves towards the mid-1.59 range to 1.60 for the possibility of shorting.

Here's the three-hour chart. Note the overbought state of RSI and the negative divergence.












© 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.

GBPUSD—rallied past resistance

I'm still long from 1.5419 and 1.5602 and added another position early this morning at 1.5750 (stop is already at breakeven).

Now that the Cable has gotten above the strong resistance at 1.5651 and had a three-hour close above 1.5740, there's little in the way of a move to 1.5912 and possibly 1.6000. Just in case this doesn't happen, I took partial profits on my position from 1.5419 at +430 pips.

Support is 1.5740 and 1.5650. I will most likely add positions on a pullback.

Also, it looks as though the Swissy and Cable are finally diverging as I wrote about yesterday. This is more normal.

© 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.

GBPUSD—rally

I'm still long from 1.5419 and I added another position yesterday at 1.5602 as the pair looked stronger as the morning went on. Cable has reached a high of 1.5682 yesterday and it's struggling with that now. While it has climbed above the top of the daily triangle, there is still the strong resistance at this level that I wrote about yesterday. The resistance consists of a weekly channel resistance price and the weekly 20 EMA of 1.5651 as well as some fibos.

Yesterday, I showed the triangle on the daily chart, which it is now slightly above. I've drawn a blue line on the three-hour chart below to show that the pair could be in an upward rectangle (possible bear flag especially since momentum is negatively diverging from price). The low of this would be 1.5451. I'm not sure the triangle is dead. The rectangle is just another way of looking at the price movement. However, a sustained close above 1.5680 would be significant. Additional resistance is at 1.5710/40. After that there's little significant resistance until 1.5912.

Below 1.5451 is support at 1.5345, 1.5297 and 1.5210 (double top—1.5604 and the trough is 1.5407).

As I wrote about the Swissy, it's unusual for both the USDCHF and GBPUSD to be trending upwards together. I expect the two will diverge at some point, possibly later today.

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.

GBPUSD—pounding at resistance

I'm still long from 1.5419. However, I'm thinking of closing my long or at least lightening it up significantly.

The pair hasn't been able to climb above 1.5604 which is the top of the triangle. This is also near a weekly channel resistance price and the weekly 20 EMA of 1.5651 as well as near some fibos. A drop back to 1.5445 (the triangle bottom) would proceed another move up. Since symmetrical triangles are often a continuation move (and Elliott triangles allegedly break in the same direction as the prevailing trend), then eventually the pair should break down from this triangle to some very attractive targets. Below the triangle is support at 1.5345 and 1.5297.

If the pair should break above 1.5651, additional resistance is at 1.5710/40.

I'm posting the daily chart below which shows the old bull flag I drew some time back. It's back around this breakout point from that flag so one could see some upside potential if this were to take off. That move would bring it in line with a C wave on the monthly chart. However it seems unlikely to happen as the pair has broken below two uptrend lines. There's also an asymmetrical, confirmed (1.5485) head and shoulders pattern with a price target of 1.4670.

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.