Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. CMS will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.
Foreign currency trading is not conducted on an exchange. CMS is acting as a counterparty to its clients’ transactions and as a result, CMS’ interests may be in conflict with its clients. Since CMS acts as the buyer or seller in the transaction one should carefully evaluate any trade recommendation provided by CMS or any of its solicitors. Foreign currency trading involves a substantial risk of loss and may not be suitable for all investors.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.
GBP/USD Pattern Setup
- Daily and 4H: Why do we stalk? In the last post, we stalked a completion of a gartley. Since then, the market has consolidated and the 1.6650 was an important short-term powerline, which held at first. (Refer to Daily Technical Update 11.25.2009 GBP/USD)
- The market has since brought the pair down tumbling 450 pips from 1.6750 down to 1.6300. This completes the projection that followed the bearish gartley and is a support, confirmed with stochastic reading turning in the oversold zone, so if there is further decline, now is a time for a minor correction.
- We see in the daily where this further decline is possible in the medium-term.
- The Head-and-Shoulder formation which was broken gives a minimum projection to 1.6000. This is also the 78.6% retracement level.
- At the moment, we stalk this pair to see if there will be a correction back to the 1.6450 powerline, where we can consider a short-/medium-term projection to the 1.600 area.
Fan Yang
Currency Analyst,
Commodity Trading Advisor