GBP/USD 24 JANUARY 2012

GBP/USD

Price violated the B high yet again and found resistance at 5600 before falling back.

FOR TODAY:

We will call the 5601 high of yesterday the new B with A being down at 5232. We will now wait for either a BF786 and a bearish cs formation for a short trade, or a long trade setup down at the 618/786 of this AB swing.

SHORT: WILL ONLY BE GOING SHORT IF:

We need a BF786 and a bearish cs formation for a short entry; right now we have a B high. If the 5536 low remains the swing low then we will have a BF786 up at 5587. Once we hit that price, trade a bearish cs formation after that for 60-70 pips since the prior bounce is a shallow one. Stops 10 pips + spread above the cs formation, max 1.5% risk.

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

LONG: WILL ONLY BE GOING LONG TODAY IF

We need price down at the 618/786 and a bullish cs formation for a long trade setup. Limits for the 618 will be 60-70 pips, with  the 786 entry being a ST to the BF786. Stops 10 pips below the low of the cs formation, max 1.5% risk.

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