GBP/USD Weekly Signal- October 24, 2011

By: Fadi Steitie 

If we take a technical look at the Weekly chart GBP/USD using Ichimoku
averages, we still notice a negative bias expecting a drop in the trend
due to the following reasons:

1- Trend broke the support line.
2- Tenkan (Blue) 9 days crossed Kijun (Red) 26 days on 9 July 2011 and
trend fall into Kumo (Cloud)
3- A pull back in trend testing the new resistance before trend falls into Kumo.
4- Chikou (Black) past 26 days is pointing toward a major resistance on 23 April 2011 which indicate another resistance.
5- Chikou (Black) 26 days in the past has crossed Kijun (Red) which indicate a strong bearish view
6- Senkou spans have crossed 26 days into 52 days (Dead Cross) with another pull back testing Kijun-sen (Red) one more time before trend falls.
I do expect another corrective wave taking the trend down inside Kumo.

GBP/USD Weekly Chart 10/24/11

Below is hourly chart using Elliott waves and
Fibonacci analysis. we can notice the following:

Motive trend is moving toward 0.786 Fibonacci level by unfolding the final minor wave v. I do expect a drop in trend from that point
1.60530 level so I suggest the following trading strategy:

Signal: Sell at or near 1.60350 (I would suggest to wait till price bounce from that price point).
Strategy: Elliott Waves
Description: Trend is reaching 0.786 Fib level with a complete wave v which alert to an end of a trend and start of a new corrective wave expecting ZigZag, Flat or a motive wave (Options are open in this case).
Target : I will leave the target open until waves i through iii get the shape.
Stop Lose: 1.61350 and to be adjusted later once trend progress downward.

GBP/USD Chart 10/24/11

Fadi Steitie

Fadi Steitie is an entrepreneur, investor and professional Forex trader who shares Forex signals with DailyForex.com based on his keen understanding of the market. His favorite pair is EUR/ USD because almost 40% of traders trade this pair and it does match most of his pattern recognition strategies. He is an expert in Elliot Wave principles as well as Ichimoku Kinko Hyu which he is currently researching. So far he has not seen many English translated books about this method of technical analysis, however he is continuing to read about it and believe this method has as much to give to traders like the Elliot Waves method does. Fadi is looking for the magic behind this principle even though many do not research this trading system.