Howdy Folks!

I appreciate your patience while I was out for a few weeks but I’m now looking forward to blogging my thoughts about GBP/USD on a daily basis again. I’ve decided to limit my coverage to the GBP/USD in order to keep our discussion focused on one currency pair and it’s particular supply and demand based quirks. This should give us an opportunity to synchronize the discussions in my weekly FX Street webinar with what happens throughout the rest of the trading week related to the GBP/USD. I’ll start each week out with some brief thoughts about the GBP/USD and what I’m expecting to watch for during the upcoming week and then I’ll update my actions on the GBP/USD every night. My goal here is to demonstrate how I actually apply the tactics discussed in my weekly webinar using entry, stop and limit orders to trade around a day job on the GBP/USD. As usual, anything I write i this blog is simply my opinion and is not a direct recommendation to buy or sell any currency contract. I highly recommend you do not trade live money until you have demonstrated a profitable track record using a demo account and even then you should always use proper risk control to avoid catastrophic losses to your trading capital. With that in mind, let’s take a look at this week’s GBP/USD chart.

Starting With the Weekly Chart

The GBP/USD’s rally appears to be stalling slightly as the pair moves into consolidation between key Fibonacci ratios taken from last years sharp decline. The support and resistance landscape suggests a range could be established between the 50% ratio and 38.2% ratio at least for the short term. Looking at the last three weekly candles we see a rally, new high spike and two “pull back” candles which may suggest the pair is finding support at the lows around $1.64 which surprise, surprise, corresponds with a potential support level on the daily chart. Overall this weekly chart isn’t that exciting to me. The pair is stuck in the middle of an ascending channel’s range and I don’t expect anything cool to happen until the pair works it’s way to the edges. My longer term technical view suggests this pair may rise to challenge the 61.8% level over the next few weeks which corespondents with failed support around $1.7700. With that in mind, long trades planned this week might be an opportunity to join the longer term trend with reduced risk. On the other hand, $1.70 held resistance well and my offer a short opportunity down to the 38.2% level in the range. We’ll just have to wait and see.

The Daily Chart

Sticking with the long trade theme the daily chart is trending in a nice ascending channel. In my opinion the nearest major support / demand level is near the round number of $1.61. This is definitely an area I’ll be watching throughout the week. On the short side we may consider watching the $1.7100 level. This area provided decent resistance last week and would put the market near the top of the ascending channel.

Stay tuned and best of luck, should be a fun trading week.

Ryan