GBP/USD In a Breakout Zone

Doug Rosen

By: Doug Rosen

The GBP/USD starts off today as it did yesterday on the 61.8 fib of the recent move up at 1.5612. This is a very bullish fib level, however, the position of the ema's is very bearish for the pair. Price is riding the 5 ema to the downside and the lower Bollinger band is wide open pointing straight down. I would expect price to make contact with the daily 5 ema and be pushed down further, possible down to the next fib level, the 78.6 at 1.5462. I cannot ignore however, that the stochastic is in the oversold zone.

GBP/USD Daily 11/23/11

Moving on to the 4 hour time frame price seems to be in a bit of a triangle trap. I love these types of price traps since it narrows down what price may do. I will be watching for a break of this trap either to the upside or downside. Downside break is more realistic since we are in a downtrend and price has been making lower highs and is below the 5 ema which could force price down.

GBP/USD 4 Hour 11/23/11

On the 1 hour time frame it looks like price may already be starting the breakout to the downside and the ema's seem to be pushing down hard on price.

GBP/USD 1 Hour 11/23/11

On the 15 minute time frame price is looking extremely bearish and the ema's are pointing straight down as is the lower Bollinger band. Watch out for a double bottom around 1.5581.

GBP/USD 15 Minute 11/23/11

Doug Rosen
Doug Rosen is a Florida-based Forex trader who became a skilled technical trader through 3 years of intense practice and self-teaching. He now coaches a live trading room and analyzes the market on forextradeplans.com.

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