FX.co ★ GBP/USD: Technical Analysis for November 9th, 2011.

Pivot Point: 1.6086.

Time Frame: H4.

.

Overview:

The GBP/USD broke the resistance at 1.5867 and turned back to support last week. Therefore the pair has already formed a strong support at 1.5867 on H4 chart (Green Horizontal Line), Aswell after breaking 38.2% and start signing for bullish market on this level, it should be noted that the price has been set above 38.2% of Fibonacci retracement levels and the price couldn't close below the support last week since 21st of October 2011. Futhermore, the RSI has still positive on the daily frame, so it calls for a new upleg. Then, according to previous events, the pair has still been trapped between 1.5867 and 1.6173. For that it is a good sign to buy above 1.5944 with a first target of 1.6075, and continue towards 1.6170 (It also should be noted that the resistance 3: 1.6173). Meanwhile, if the support could not break and closure above it on H4, it will also a good sign to sell as swing at 1.6170 with a target of 1.5950 (50% of Fibonacci retracement levels).

Trading Recommendations:

According to previous events, the price has still been trapped between 50% of Fibonacci retracement and 61.8%.

Long Buying:

• Buy above 1.5900 with a first target of 1.6075, it might resume to 1.6170.

Short Selling:

• Swing trade at 1.6173 in order to sell with a traget of 1.5950.
  

Intraday Technical Levels:

R3: 1.6230
R2: 1.6180
R1: 1.6136
PP: 1.6086
S1: 1.6042
S2: 1.5992
S3: 1.5948

Observation (s):

Please check out the market volatility before investing, because the sight price may have already been reached and scenarios become invalidate.

First key level at 1.5867.

Second key level at 1.6173.

Warning (s):

Stop Loss should NEVER exceed your maximum exposure amounts.
Risk to reward ratios are important and should be calculated.

Example 1:

A risk reward ratio of 1:1.5 is recommended:
Risk: 30 pips must make a profit of 45 pips.
30 pips * 1:1.5 = 45 pips.

Example 2:

A risk reward ratio of 1:1.5 is recommended:
Risk: 45 pips must make a profit of 60 pips.
45 pips * 1:1.5 = 60 pips.