Signal for 3/07/2009 for: GBP/USDGreat day yesterday, I got out with 61 pips profit. Today I don’t see much happening after yesterday’s fall. I prefer staying put on Fridays after such a drop in the market the previous day. We may see a retrace at this point. We seem to have a good support at the 1.6335 level. At this rate I expect this level to be of importance in today’s session. Today's Signals: Ok...let’s have a look at today’s levels: R3-1.6668
Possible Scenarios: Buy Signal: At this point we may be in a ranging market. We have good resistance at 1.6363. If at London open, price is above that level, I may start looking for a buy entry with the pivot point being the target. At this stage I will exit my full position and wait to see what price does next. For a confirmation move to the upside, I will wait for price to trade above 1.6420 level. If that’s the case, we may have a target set at 1.6465. Due to tight range, small profit targets will be set. Make sure to exit half the position mid way to the profit targets. Please remember, those are simply possible targets 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: If by London open, price is trading below pivot point and 1.6363, which is acting as a strong resistance level, there may be a good opportunity for a sell signal. I will start looking for a good entry point with first profit target set at 1.6313. Price may encounter some support at 1.6339 on the way down. Thus I may be exiting half my position at this point and let the rest run to 1.6313 where we have strong support. Price may or may not break this level. If it does and all the rules of entry are met, we may have another target at 1.62300. There is another support that may stop price from moving further down which is at 1.6284. Thus to be on the safe side, most of my position will be taken out at that level. Please remember that, proper money management will be required here to maximize your profit. 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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