GBP/USD 25 MAY 2012

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Price broke the B low giving us a new B low for the AB swing. Price retraced to the 382 of the swing. We are back at the lows again.

FOR TODAY:

We can only sell higher up at the 618/786 of this AB swing, we will wait for a retracement before selling.

Since we are the B lows, if we get a clear bullish cs formation we can go long.

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

SHORT: Will be going short only IF:

We need price to retrace to the 618/786 before we can consider going short. Until then we will patiently wait.

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

LONG: Will be going long today only IF:

Price is trading near the B lows since the late US session, we need a bullish cs formation here to drive us higher. We will enter a long trade on such a bullish cs formation. Place stop 10 pip below the low of the cs formation, max 1% risk. Limits here will be 70-80 pips.

A sustained break of 5638 negates this view.

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