GBP/USD 27 MARCH 2012

GBP/USD - follow me on twitter @fxdailyforecast and stocktwits.com/fxg

We went short yesterday on the bearish cs formation and lost 23 pips on that trade when we exited after the strong bullish cs. We didn’t enter long immediately since the stop was too big.

FOR TODAY:

Price went on to rally past the 5922 interim high but still needs to clear and hold above the 5991 highs. A violation of the 5991 highs will start a reversal on this timeframe. We are therefore still in sell territory at present until 5991 is taken out, BUT we will use dips followed by bullish cs formations to target 5991.

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

SHORT: Will be going short only IF:

We get a clear bearish cs formation inside the 5991 highs, this failure will push price lower, even if it’s only for a dip. Place stop 13 pips above the high of the cs formation, max 1% risk. This will be considered a ST with limits down at the BF786 over coming sessions.

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 get a dip followed by a clear bullish cs formation. This will be a sign that the bulls are heading for 5991 highs, place stop 10 pips below the low of the cs formation, max 1% risk. Limits defined if set-up occurs.

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