GBP/USD 16 MAY 2012

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

No trade setup on Sterling yesterday, price fell to the 1.618 of the AB swing.

FOR TODAY:

We now need to wait for a B swing low to form before we can draw fibs. We will then need to wait for a retracement to the 618/786 of this swing followed by bearish cs formations for a sell entry.

Long trade set-ups are not considered at present, since we don’t even have an established B swing low in place.

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

SHORT: Will be going short only IF:

Once we have an established B swing low in place, we then need price to rally to the 618/786 of this swing and give us bearish reversal cs formations at either of these fibs. Place stop 13 pips above the high of the cs formation, max 1% risk. Limits defined at entry.

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

LONG: Will be going long today only IF:

No long trade set-ups in this session probably, since we don't even have a B swing low in place yet.

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