GBP/USD 8 DECEMBER 2011

GBP/USD

Price gave us the dip and the bullish cs formation we were looking for yesterday and rallied to the limit-10 pips inside the BF786 as per analysis for a profit of 87 pips.

FOR TODAY:

We are close to the BF786 which will be sell territory IF we get a bearish cs formation. Else we expect price to rally and take out the B high at 5779 giving us a new AB swing.

Only if price takes out the A low then we will be reversing on this time frame.

SHORT: Will be going short only IF:

We need price to hit the BF786 at 5732 and thereafter give us a bearish cs formation. The cs formation can be anywhere inside the B high .This will be a ST and will have a limit down at the A low since we had an 86 prior bounce, stops above the cs formation, max 1.5% risk.

If we don’t get the setup we are looking for then we don’t trade.

LONG: Will be going long today only IF:

We have already reached the limit at 5722, but if we get a clear dip and a bullish cs formation we can trade long since price will probably then rally to violate the B high.

For position traders – The long trade was re-established on yesterdays dip  and we will see if we get a break of the B high to open the topside for rallies higher up.

If we don’t get the setup we are looking for then we don’t trade.