FX.co ★ GBP/USD technical analysis for November 8, 2013

Overview:

• GBP/USD: According to the previous events, the price has been trapped between 1.6050 and 1.6090; hence, it is of the wisdom to be careful in this area. Therefore, the first step is to wait for a period of a tight sideways range market before breakouts. Then, it is probable that the market is going to start showing the bullish signs. In other words, it will be a good sign to buy above 1.5980 with the first target of 1.6060 and it will climb towards 1.6110. However, if the pair fails to break 1.6120, the market will indicate a bearish opportunity below 1.6120, then the level will act really as strong resistance; that it will be a good sign to sell below 1.6120 with the first target of 1.6055 and it will call for downtrend in order to continue bearish move towards 1.5979 (23.6% Fibonacci retracement levels), the level of 1.5944 will form a double bottom.

Forecast:

• Buy above 1.5980 with the first target of 1.6060, it might resume to 1.6120.
• Stop loss should be set below 1.5935.
• Below 1.6120 (1.6145: 78.6% of Fibonacci retracement levels) look for further downside with targets at 1.6014 in order to test the weekly pivot point and 1.5950.
• Stop loss should be set above 1.6153.

Observations:

• Use historic prices to determine future prices.
• Fibonacci retracement should be used to determine an accurate psychology level of support and resistance, and playing according to it in this kind of period.
• Fibonacci in a range trader (it is looks like the trend is trapping and going up or down, if you sell or buy for a long term in this period you will go sure for losing your profit.
• Stop loss should never exceed your maximum exposure amounts.
• Usually the market has a high volatile, if the last day had a huge volatility.