Signal for 1/07/2009 for: GBP/USDRecap of yesterday's events: Yesterday was quite a day; the pound headed up after our news announcement then fell a whopping 300 pips to the downside. I didn’t have much of an opportunity to get a good entry so I stayed put for the day. Better be safe than sorry as they say. Today's Signals: Ok lets have a look at today’s level R3-1.6983
Possible Scenarios: The GBP/USD had a move to the downside yesterday an hour after the news announcement. I didn’t take any trades as I said earlier. Today hopefully should be a good one as we have some major support and resistance formations. Buy Signal: We still have some major resistance at the 1.6550 level which is near our pivot point for the day. I will wait for the London session to open and let price to trade above that level. From there we may have a first profit taking at 1.6598 and a second profit target at 1.6650. If price trades above those levels I expect price to head around the 1.6675 level. For now its pure speculation, we just need to see how price reacts with the given levels. Please remember, those are simply possible target where price may head up due to heavy cluster formations and analysis. This is not 100% accurate, no system is. Take profit each time you reach a certain level and bring your stop to break even. Note: Wait for a retest with 20EMA, 50SMA all heading up. Make sure that the 200SMA is not in the way when price is heading up as this may act as a strong resistance. Sell Signal: Today I’ll be monitoring the 1.6420 level very closely. I feel price may head down once this level is broken. However after the massive fall we experience yesterday, price may retrace before heading down. If by London open the price is trading below pivot point and 1.6460, then this will lead me believe that price will head down for the day. Thus my first profit target will be set at 1.6405 where we have major support level. I will exit my profit at this level if I get a good entry point. Then I will wait for that major support level to be broken before looking for another entry to the downside. My next profit target there after is set at 1.6360 and my second target is 1.6285. We may encounter some support at 1.6320 level. If that’s the case, you may want to take out some profit and let the rest of your position run. Please remember that, proper money management will be required here to maximize your profits. Wait for retest of the levels given once broken or until a bullish candle is formed after the retrace (preferably on 15 mins chart making sure that the 20EMA and 50SMA obeys the rule of entry) PS – You may decide to use your own strategy and use those levels as entry and exit points Happy Trading.
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