GBP/USD DAILY FORECAST 18 MAY 2011

ABBREVIATIONS

cs – Candle stick

PT – Position Trade

BF – B Failure

C786 – Counter 786

GBP/USD – HOURLY CHART

We are still in the bear AB swing on Cable, we are currently at the 786 of the swing. If we get a bearish cs here, or slightly higher up but still inside the A, we will look to short down to the BF786. Alternatively if a price continues to rally, we will have to wait for the A to get taken out, and then wait for a new B to form and pull fibs.

SHORT: Will be going short only IF:

We get a bearish cs formation at current levels or higher up inside the AB swing, this will constitute a short trade setup with limits down at the BF786, hence a PT setup.

LONG: Will be going long today only IF:

We need price way down at the BF786 before we can look for long trades. Else if price takes out the A high we will be reversing, and then we will wait for a new B to form, then pull fibs.