GBP/USD 7 MAY 2012

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

No trade on Friday past since it was NFP.

FOR TODAY:

Price took out the A support low on Sterling starting the reversal process on this timeframe. We now have to wait for a new B swing low to form and a retracement back to the 618/786 for a short entry.

Long trade set-ups are not considered at present.

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 rally followed by a bearish cs formation after price hits the 618/786. Place stop 13 pips above the high of the cs formation, max 1% risk. Limits will be defined later.

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

LONG: Will be going long today only IF:

Probably no long setups today since we don’t have a decent swing low at time of writing, we also need a swing high followed by a test of the BF for a long trade set-up. Will wait for a clearer set-up.

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