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GBP/USD Retracement in Progress

By Doug Rosen
Doug Rosen is a Florida-based Forex trader who became a skilled technical trader through 3 years of intense practice and self-teaching. He now coaches a live trading room and analyzes the market on forextradeplans.com.

By: Doug Rosen

I will start my analysis with this pair taking a brief look at the weekly chart. Price is at a fib level with the 13 and 5 ema just below price with a stochastic pointing up. On the daily chart the stochastic says the opposite. It is in the overbought zone pointing down. Price appears to be climbing up and most of the ema's are below price action and we are at a fib level so I do expect this pair to be bullish, however, a break to the downside is also possible.

GBP/USD Daily Chart 10/31/11

Moving on to the 4 hour monthly pivot chart I can see an ema crossover to the downside and price has breached below the ascending trend line. Could it be a break out or a fake out? We will just have to watch this pair carefully. Price recently broke the R3 and has come back down to visit it at 1.6010. The 55 ema is not too far below.

GBP/USD 4 Hour Chart 10/31/11

Moving on to the 1 hour weekly pivot chart price came down to the S1 at 1.5960 and has bounced up. The stochastic is in the oversold zone and prepping to cross up.

GBP/USD 1 Hour Chart 10/31/11

Finally, we take a look at the 15 minute daily pivot chart and see that price is just below the M0 and that the upper Bollinger band is pointing down and closing in on price ads the stochastic is near the overbought zone. I am bullish with this pair but I do expect some further retracement to the downside before price continues to head up.

Doug Rosen
About Doug Rosen
Doug Rosen is a Florida-based Forex trader who became a skilled technical trader through 3 years of intense practice and self-teaching. He now coaches a live trading room and analyzes the market on forextradeplans.com.
 

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