Tonight is the first night in a long while that we will look to go short on cable. We believe Mr. Bernanke said what most people wanted to here and that his statement will satisfy most traders.
There are several reasons apparent on the charts indicating that we may have already seen a swing high at 1.8729. The most obvious is the 4-hour chart MACD.
We have mentioned the divergence several times already and now the MACD line has taken a sharp downward angle off the signal line. The daily MACD is also making a sharp turn to the down side and it appears a cross over the signal line to the down side is coming fast.
Also on the 1-hour chart there have been three consecutive candles dropping away and not touching the upper Bollinger band, indicating the up-trend in weakening.
Last night we set our entries at 1.8650. We got stopped out of our trades for a 40 pips loss. (How many other traders tell you about their losing trades?) This is another indicator of a possible reversal. If not a reversal certainly some sideways trading, and we will adjust our trading accordingly.
Tonight we are trading around 1.8560. We will be looking to go short, in an attempt to trade within the range just in case we are sideways.
Remember, in order to analyze and trade the markets on your own, you must get a top notch forex trading education. Whether it be an at home forex trading course or a live forex seminar, take the time to get educated.
I truly hope that all of you have been following our outlooks on the Forex market. Last week, alone, we netted over 500 pips in profit.
Now, granted, that is a GREAT week of trading, but they do come often enough. But, how are you supposed to know when they are coming?
You aren't. What you are supposed to do, is be ready for anything and everything the forex markets throw at you.
The only way to do that is by getting a quality Forex trading education.
Sorry about that, I got a little sidetracked. Let's get to the outlook for the Pound/Dollar.
Alright, one more tangent. We only discuss our opinions for the Pound in these outlooks. But, you can use the skills you learn to trade any currency pair.
Now, really, let's get to the trading.
Cable continues its climb, and there is no end in sight, which means we should watch for a reversal...ha ha. The most enlightening fact I ever learned about the forex market is that it is completely random.
We can predict, usually with great accuracy support and resistance levels using retracements levels and pivot points just to name a few, but the market can and will change direction when you least expect it to.
So our word to all our traders is caution. Be diligent in assessing your risk when you make your trades. With that said we expect the rise to continue towards the 1.9549 previous high.
For Friday we set our entries at 1.8500. We had profit targets of 1.8540 and 1.8590, we were able to close our first trade for 40 pips and our second trade was closed for a 90 pip profit.
Tonight we are trading around 1.8610. We will be looking to go long again, and we will continue cautiously watching for an unexpected reversal.
Remember, in order to analyze and trade the markets on your own, you must get a top notch forex trading education. Whether it be an at home forex trading course or a live forex seminar, take the time to get educated.
We find these support and resistance levels using a set of technical indicators and other variables that we have found to be most successful for us. We use several other indicators and a variety of technical analysis techniques to enter and exit all of our trades. Every trader will have a different combination of indicators that makes the most sense to them. Learn how to develop your own successful Forex Trading style with our Elite Forex Trading Course or Forex Seminar.
Eddie