Tagged "GBP/USD"

7-23-08

3:26a GMT – GBP/USD is approaching intraday support on the 4H and daily charts at the bottom of its bullish channel (blue lines on chart below). We also have possible daily support at 1.9835 and this area of double support might provide a good bounce on the pair. Possible event risk at 6:45a GMT with French Consumer Spending (a weak Euro could support the dollar across the board) and the Bank of England minutes at 8:30a (mention of a drop in interest rates could send the GBP downward).

Trading Idea: long positions favored above channel support currently found at 1.9830 with targets at 1.9890, 1.9925 and 1.9985. Look for candlestick signals to confirm. If support is broken look for a retest of 1.9805 and 1.9760.

(click to enlarge)

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7-16-08

1:49a GMT – Bad news for the US stock market, real estate industry and the economy in general have sent the USD sharply down across the board, blowing out stops across the currency pairs. The GBP/USD was no exception and we have seen the cable advance over 300 pips against the greenback. News for the British economy is not great either as they look to balance inflation with slowing growth and at a minimum I am looking for the pair to consolidate gains in the coming days as it crashes off the channel resistance (top red line below). The RSI also just recently crossed back from overbought (70) on the 4H.

Trading Idea: Short positions below 2.0175 are favored with targets at 2.0085, 2.0000, 1.9935 and 1.9850.

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7-15-08

6:00a GMT – After a devastating week for the USD (and its economy in general) the GU pair has risen to a strong resistance area between 1.9990-2.0005. While the scope of the USD recovery will hinge on economic data coming out of the US and the performance of the stocks tomorrow I see this resistance area putting up a fight and possibly sending the pair back down.

Trading Idea: Shorts favored below 2.0005 with targets at 1.9980, 1.9950 and 1.9915.

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7-11-08

5:25a GMT – GBP/USD remains bearish both on the daily and 4 hour charts so I am looking for selling opportunities. I expect resistance to hold below 1.9850 for a return down to the 1.9675 area.

Trading Idea: Look for bearish candlestick confirmations for the pair as it approaches resistance area, with short targets at 1.9775, 1.9745 and 1.9675.

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7-7-08

22:24 GMT – GBP/USD remains very bearish on the daily charts so I am looking to sell rallies on the 4H or 1H charts. On the daily charts the pair has continued to make lower highs while bouncing off of the 1.9300 support. On the 4H charts we see a top has formed along the 1.9850 resistance and I expect this to hold.

Trading Idea: Short positions below 1.9850 with targets at 1.9815, 1.9780, 1.9705 and eventually 1.9615.

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6-24-08

7:04a GMT – My bias remains bullish on the GBP/USD pair has continued to make higher lows (though the highs have been a bit lower as well – meaning we may soon see a squeeze play develop on the daily charts). On the 4h charts the pair is approaching the trend support, currently around 1.9580.

Trading Idea: Look for a bullish reversal candlestick to confirm the trade with longs favored above 1.9580 with targets at 1.9635, 1.9695 and 1.9745. If support is broken look for a test of 1.9485 support.

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6-19-08

3:41a GMT – The GBP/USD is facing downward pressure from daily, 4h and 60M charts. Closest resistance is at 1.9625, daily resistance is currently around 1.9660 (blue line below) and a daily close above 1.9681 is needed to break the downtrend.

Trading Idea: Will look for a bearish candlestick reversal around any of the resistance areas (preferably the daily) to enter short. Targets are at 1.9600, 1.9575 and 1.9485 and lower.

UPDATE: Pair charged through resistance without giving a bearish reversal candlestick (so no trade was entered, right?) as you see on the chart below. A doji did form about 4 hours ago though after only a 2 candlestick rise. We will wait to see the close of the next 4h candle for direction though pair appears to have hit resistance below 1.9800.

RESULT: 0 pips

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6-9-08

01:06 GMT – Part of being a successful trader is looking not only your own “comfort” chart time but also looking at the bigger picture as well. This week I chose to post my weekly chart analysis for EUR/USD, GBP/USD, USD/CHF and USD/JPY. I do the analysis on all the pairs I trade, and recommend you do the same for the “big picture” but don’t have time to post them all.

Want to see a different pair next week? Post your comments below!

EUR/USD: As you can see on the chart below the EUR/USD is still firmly in an uptrend unless a clean break of 1.5284 is made. EMA20 (green line) has been acting as good support for the pair since early 2007 and last week showed us a strong bounce of this support. A close this week above 1.58 would confirm the resumption of the uptrend and is likely. The last time the weekly charts looked as they do now was in late 2007 when the pair was in a 1.43-1.50 range, which ended up breaking to the upside off a bounce of the EMA20 and challenging 1.60. Look for a similar result in the coming weeks with a challenge of 1.70.

USD/JPY: I believe that since 6/07 the UJ pair has been in a good Elliot Wave model drop with the rally below 100 the last hoorah of the 5th leg. Whether we are in the 1st leg or the 3rd leg of the retracement is a matter of debate (what’s not in Forex? ;). Last week’s candlestick was bearish but did make a new high and showed decent buying pressure. I don’t believe the doji means much considering the pair has been in choppy trading for the past several weeks. I expect to see more gains this coming week, but this next week will help to show the direction of the pair. Also the RSI closed above 50 for the first time in almost a year. A concern is definitely the EMA30 which has provided resistance for the pair in the past and also the resistance at 106.35 (former weekly support). A close above 106.50 would clear the way for the EMA50 currently around 108.

The exponential moving averages are still aligned in a downtrend though the EMA10 has flipped up and if the retracement continues will soon cross the EMA20.

USD/CHF: Pair remains locked in a clear downtrend, is getting pushed down by the EMA20 resistance (solid resistance since 7/07) and its RSI has just bounced off of 50 to the downside after posting a bearish hidden divergence a few weeks back. Selling near the EMA20 looks like the best strategy though last week’s candlestick was a bearish engulfing so we may or may not get another opportunity on the weekly chart for awhile.

Major concern is that the pair is in the 2nd retracement leg of a 5-3 Elliot Wave model retracement (since the possible 5 wave drop beginning 7/07), meaning a third retracement to the 1.0750 area could occur before more losses.

GBP/USD: The GU pair continues in its bearish channel since the trend reversal on 11/07. Two weeks ago we had a bearish doji that was NOT confirmed by a bearish close under the previous candlestick. Instead we saw a wave of buying at the end of the week courtesy of the ECB comments about the Euro rate increase. Until we see a close above 2.02, though, the pair remains bearish. From the weekly chart below we can see the best strategy for the week will probably be to sell of channel tops.

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6-4-08

18:43 GMT – GBP/USD crashed through strong resistance at 1.9600 and is currently consolidating around 1.9550 as bears and bulls figure out where this should go. With RSI hourlies oversold I expect the bulls to begin winning out for a return to 1.9600 and then a stab downwards to 1.9500.

Trading Idea: Wait for bearish candlestick between 1.9575-1.9600 and enter short with targets at 1.9540 and 1.9500. If 1.9600 is clearly broken look for a test of channel resistance currently at 1.9675.

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6-1-08

23:14 GMT – GBP/USD is approaching several possible support levels, the strongest of which is around 1.9680. I expect the currency to fall to this level and then bounce off of support. Concerns are more gains for the USD. Rising RSI trend line supports the trade.

Trading Idea: The area of support is between 1.9700 and 1.9680 and is strongest at the latter. Look for a bullish candlestick to confirm the trade. Look for targets at 1.9740, 1.9780 and then 1.9810. If 1.9670 is broken look for further downside at 1.9650 and 1.9620.

UPDATE – 6-2-08, 16:43p, GU has smashed through all levels of support and now I’m looking for short opportunities near former support (now resistance). No bullish candlestick ever confirmed trade. Good no trade.

Result: 0 pips

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