Thursday December 3, 2009 - 19:27:33 GMT
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FX Times: Daily Technical Update GBP/USD Assessing Reversal Signals
9:48 AM EST
December 3rd, 2009
GBP/USD Assessing Reversal
- 4H and 1H: The attempt to invalidate the short-term bearish outlook failed as 1.6700 held. (Refer to Daiy Technical Update 12.02.2009 GBP/USD.)
- In the 4H time-frame, we may have a trigger developing but it would
give us poor reward to risk ratio using the ATR in this time-frame.
Reminder that the GBP/USD has been choppy within a ranging mode, so
targets should be limited to more conservative ones.
- We see that the 1.6250-1.6270 area is a viable target, but perhaps
since it is a very short-term projection, a 1H time-frame can be used
to assess the setup.
- In the 1H time-frame we see a completed double top. The short-term
support at 1.6625 has broken, but the stochastic is oversold and there
may be some support at the 1.6550 area. This suggests timing may be
wrong for these signals.
- Nonetheless, the above screenshot shows the reward to risk ratio is 1.6:1, if this double top formation were to be trigger. The
ratio may be improved if we are patient and wait for a correction rally
to establish a lower powerline than the 1.6700 we used above to define
the stop-loss level. W
Commodity Trading Advisor
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 clientsâ€™ transactions and as a result,
CMSâ€™ 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.
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