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Today’s Trading Edge: GBP/USD – Trading Very Technically

Posted by Edward Moya on Mar 25, 2014 11:39:00 AM
WWM GBPUSD MAR 25 2014

Two weeks ago, I mentioned that the key rejection around the critical resistance 1.6800 area will open the door for a deeper pullback possibly towards 1.6457.  Price did weaken and made a key low at 1.6462 yesterday which was just five pips away from a downward target from the March 11th post.  With the bullish Gartley pattern in play, a rebound may target either the 23.6% Fibonacci retracement level of the C to D leg at 1.6538 or the 38.2% Fibonacci level which resides at 1.6585. 

The daily chart above highlights that price may also be establishing a bearish channel that may support a move towards the 100-day SMA, which is currently at 1.6423.  If price accelerates beyond that point major support will come from the key pivot level at 1.6250. 

The trade: Sell GBP/USD at 1.6580 with a stop loss at 1.6630 and a take profit at 1.6380.  The Risk/Reward Ratio is just under 1:4. 

Edward J. Moya

Technical Strategist

WorldWideMarkets Online Trading

 

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