GBP/USD 12 JULY 2012

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

Price broke the previous day’s high, rallied shy of the 50 and then fell yesterday afternoon to the BF786. If price finds support here and rallies, we could look for 5600.

FOR TODAY:

This is a huge AB swing, when it’s usually this huge it can take some time before we get a setup to trade. We need price to retrace to the 618/786 of this swing followed by a clear bearish cs formation for a short trade setup.

Longs will be considered after a BF786 test with a 618/786 prior bounce.

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 a rally to the 618/786 of this swing followed by a bearish cs formation for a short trade setup. This might take some time since it’s a huge AB swing in play here.

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:

We will need a BF786 test after a prior 618/786 bounce, we don’t have that in place so we will not be considering long trade setups right now.

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