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GBP/USD Candlesticks and Ichimoku Analysis Print E-mail
Candlesticks and Ichimoku Weekly | Written by Action Forex | Mar 05 13 10:45 GMT

Weekly

  • Last Candlesticks pattern: Shooting star
  • Time of formation: 2 Jan 2013
  • Trend bias: Sideways

Daily           

  • Last Candlesticks pattern: Shooting star
  • Time of formation: 2 Jan 2013
  • Trend bias: Near term up

GBP/USD – 1.5159

Although the British pound extended recent decline to 1.4985 late last week, lack of follow through selling on break of psychological support at 1.5000 and the subsequent recovery suggest consolidation with initial upside bias would be seen for test of 1.5218-23 (current level of the Tenkan-Sen and previous resistance), however, uside should be limited to resistance at 1.5330 and bring another decline later. A breach of said support at 1.4985 would extend recent decline from 1.6380 to 1.4910-20 (1.236 times projection of 1.6380-1.5630 measuring from 1.5845) and possibly towards 1.4867 (100% projection of 1.6747-1.5234 measuring from 1.6380) but oversold condition should limit downside and reckon 1.4790-00 would remain intact, risk from there has increased for a rebound to take place later.

On the upside, expect recovery to be limited to 1.5320-30 and bring such a decline to aforesaid downside targets. Only above the Kijun-Sen (now at 1.5432) would abort and signal a temporary low is formed instead and risk a stronger rebound to resistance at 1.5550 but still reckon upside would be limited to previous support at 1.5630 and price should falter well below 1.5700, bring another selloff later.

Recommendation: Sell cable again at 1.5300 for 1.5050 with stop above 1.5400

On the weekly chart, although cable opened lower last week and dropped to as low as 1.4985 on Friday, lack of follow through selling suggests initial consolidation above this level would be seen and recovery to 1.5223 resistance cannot be ruled out, however, upside should be limited to 1.5310-15 (38.2% Fibonacci retracement of 1.5845-1.4985) and resistance at 1.5330 should hold, bring another decline. A break of said support at 1.4985 would extend the decline from 1.6380 to 1.4910-20 (1.236 times projection of 1.6380-1.5630 measuring from 1.5845) and possibly 1.4867 (100% projection of 1.6747-1.5234 measuring from 1.6380), however, near term oversold condition should limit downside to 1.4700 and 1.4600 would hold from here.

On the upside, although initial recovery to 1.5300-10 is likely, upside should be limited to resistance at 1.5330 and bring such a decline. Only above resistance at 1.5510 would suggest a temporary low is formed and risk a stronge rebound to the Tenkan-Sen (now at 1.5582) but still reckon the Kijun-Sen (now at 1.5684) would hold and bring another selloff later in Q2.

 

About the Author

Candlesticks Intraday Trade Ideas Update Schedule (GMT):
1st Update: 0630 - 0700; 2nd Update: 0930 - 1000; 3rd Update: 1230 - 1300; 4th Update: 1500 - 1530
Pairs Covered: EUR/USD, USD/JPY, GBP/USD, USD/CHF

Elliott Wave Daily Trade Ideas Update Schedule (GMT):
AUD/USD, EUR/JPY: 0800 - 0830; EUR/GBP, USD/CAD: 1430 - 1500 GMT

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