GBP/USD 30 JANUARY 2012

GBP/USD

The 5735 B high pretty much held with price testing 5740 and falling back. We will use the 5740 as the new B high though.

FOR TODAY:

We need to wait for a retracement to the 618/786 of this AB swing and a bullish cs formation for a long trade set-up.

Shorts will only be considered on a test  of the high and a bearish cs formation.

SHORT: WILL ONLY BE GOING SHORT IF:

We need price to rally and test the B high and fall back. Trade this bearish cs formation for a short trade set-up, stop 14 pips above the high of the cs formation, limits 60-70 pips since it’s a shallow prior bounce.

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 to retrace to the 618/786 of this swing and a bullish cs formation for a long trade setup. Stops 10 pips below the low of the cs formation - max 1.5% risk, limits for the 618 will be 60-70 pips, and the 786 will be a ST to the BF786.

If we don’t get the set-up we are looking for then we don’t trade.