GBP/USD chart setup.

[FibMaster]

The daily chart shows a major down-trend (starting November) that was broken to the upside in January.

The 4-hour chart shows a strong rally to an SK resistance level at 198.90 to 199.10

Now the decision is whether to trade this chart long based on the breakout of the long-term down-trend, or short because of the current resistance.

Let's look at both options. First the downward shorting option.

On the 4-hour chart I've drawn a supporting trend-line that needs to break before we can do any shorting. Shorts will have to be lower time-frames, below 60 minute, and only if the chart puts in consecutive lower swing highs and lower swing lows.

Also, there are some SK support levels at 198.50, 198.05, and also a little above 197.00 to 197.25 . Those support levels can be profit targets for intra-day short scalps, and may even be strong enough to support for a decent rally (watch out). If the chart can get below 197, it is even weaker, for more shorting.

For the upside possibility, for long trades, GBP/USD needs to rally above 199.00 and put in higher swing lows and swing highs intra-day. Then we can buy dips at Fibonacci levels, as long as the rally continues.

With these parameters, we are able to monitor this chart for opportunities in real-time.

Trade your plan! Comments and questions are welcome...

[ownshook]

I had sk resist @ 1.9810 level and on a 30 minute chart took a long on the low bouncing off of the up trendline.
Going to be a tight profit as the longer term downtrend line is overhead resistance.

In hindsight however, that was not a great entry as the low was not higher than the previous low. Did enter small lot however and if the upward continues, can easily add when appropriate!

[mnoae]

dear mr Neal,
> Thanks for the GBP/USD cahrt. Can you please brief how
> the resistance point 19890-19910 and support points
> 198.50, 198.05 obtained? what denotes SK? Your
> explanation will be highly appreciated.
> Regarding spot Gold your reply with chart before
> breaking 914.20 was excellent. Now with the top of
> 929.60 what do you expect next?
> With warm regards
mnoae

[ownshook]

SK is simply a confluence of certain fib levels which more times than not have shown to be very strong turning points. Neal has some outstanding video seminars on his site http://www.fibmarkets.com/videoseminar/ and they, quite frankly, have and continue to improve my own trading.

Glad to see the pound start to make higher highs/lows and is flirting with the 1.9900 level and I am looking for it to take out the 9930 level to start considering adding to my position. We shall see.........

[Lifesong]

Obviously it depends on what a trader's trading timeframe is, but I am more of a position trader and thus prefer standing aside on GBP/USD for the time being. With this in mind my view on this pair is the following:

I am cautious that the trendline break on the daily chart you are referring to could be a false break and untill I have more clarity whether it's a real break I do not believe it's worthwhile trading. Looking at the weekly chart the upper trendline confirms the SK resistance at 1.9907 and I would wait for this evening's US interest rate statement before taking any new positions. I'm convinced that this event will determine the fate of the majors over the shortterm and even more so for Cable because the UK economy has it's own challenges that makes it vulnerable and a risky to trade. But I must agree with you that once we have clarity whether SK @ 1.9910 gives way it's a good long trade and once 1.9700 breaks it's great for shorting.:D

Lastly I know you focus on Fibotrading but a cunning observation is that daily price action suggests the possibility of 5 waves down and if 1.9910 holds it could easily target lower prices towards the low 1.90s!!:confused:

In a nutshell I believe in the saying - "RATHER MISS A GOOD THAN BEING IN A BAD TRADE!!"

[ownshook]

well..have to admit....taking that long did pay out with a decent return (targets 61.8 extension) before that run down on the 30 min HOWEVER it was a sloppy setup and was quite happy to exit. Will stand aside and wait for a more clear direction instead of the dice roll.

[r-factor]

The cable has breached the 1.97 (4 hour sk support)!:D On the 1 hour chart, I am looking to short at the one hour resistance at around the 1.976 area or even at the 1.97 area. I would like a deeper retracement to enter. This is of course if the price stands as of now. However, as the down move was so fast it is difficult to find any SKs but I gave it my best shot. In any case, this is my take on the matter. I would appreciate any body elses take on the cable from this point on and their game plan.
Cheers.
:)

[ownshook]

Here is my recent trade taken on FEb 4 and closed on Feb 5

1. Noticed huge move down on 4 hour chart and bounce off trendline
2. Fib levels put on chart
3. Small rally and fibs placed on that move down
4. Confluence of 38 fib from higher level and 61 from lower plus trendline bounce
5. Entered short
6. 61.8 expansion target...(usually have a 10-15 point buffer on each side when away from computer and use alerts when at home)
7. Bounce close to expansion (3 pips away!!!!) plus trendline.
8. Closed trade for nice profit.

See chart.

I am happy with that trade because I felt I had valid reasons technically to enter and exit.

NB: Also very happy that I reactivated my esignal package. I much prefer this over others.

[ownshook]

The cable has breached the 1.97 (4 hour sk support)!:D On the 1 hour chart, I am looking to short at the one hour resistance at around the 1.976 area or even at the 1.97 area. I would like a deeper retracement to enter. This is of course if the price stands as of now. However, as the down move was so fast it is difficult to find any SKs but I gave it my best shot. In any case, this is my take on the matter. I would appreciate any body elses take on the cable from this point on and their game plan.
Cheers.
:)

I am wondering if Fibmaster can clarify if that is a valid SK support.

I saw that on my 4 hour chart but I didn't qualify that bear bar as a valid swing high. In fact, it looks like you have to drop to at least a 15 minute chart (something I don't generally do in forex due to noise) to even get a little hesitation.

HOWEVER....it does play out as SK at much the same level when using fibs on the wave down and the retracement as I have on my posted chart.

[FibMaster]

I had sk resist @ 1.9810 level and on a 30 minute chart took a long on the low bouncing off of the up trendline.
Going to be a tight profit as the longer term downtrend line is overhead resistance.

In hindsight however, that was not a great entry as the low was not higher than the previous low. Did enter small lot however and if the upward continues, can easily add when appropriate!

Generally I liked your trade except for the overhead resistance at 198.90 to 199.10.. So your tight profit was very appropriate. Also yes, a higher swing low would have been a better setup, and above that SK resistance would be much better!

[FibMaster]

dear mr Neal,
> Thanks for the GBP/USD cahrt. Can you please brief how
> the resistance point 19890-19910 and support points
> 198.50, 198.05 obtained? what denotes SK? Your
> explanation will be highly appreciated.
> Regarding spot Gold your reply with chart before
> breaking 914.20 was excellent. Now with the top of
> 929.60 what do you expect next?
> With warm regards
mnoae

Mnoae, I apologize for the delay in answering.

SK is a basic concept that I teach in my video seminars. Not all Fibonacci levels are equally strong. You have probably noticed already that some are more powerful than others. SK are the strong ones. Since I can't really duplicate my video seminars here in text, I encourage you to study my video seminars for answer to this and many other questions.

I constantly receive raving thanks from many traders who have studied my seminars, so I'm sure you will enjoy them and benefit greatly.

-Neal.

[FibMaster]

Obviously it depends on what a trader's trading timeframe is, but I am more of a position trader and thus prefer standing aside on GBP/USD for the time being. With this in mind my view on this pair is the following:

I am cautious that the trendline break on the daily chart you are referring to could be a false break and untill I have more clarity whether it's a real break I do not believe it's worthwhile trading. Looking at the weekly chart the upper trendline confirms the SK resistance at 1.9907 and I would wait for this evening's US interest rate statement before taking any new positions. I'm convinced that this event will determine the fate of the majors over the shortterm and even more so for Cable because the UK economy has it's own challenges that makes it vulnerable and a risky to trade. But I must agree with you that once we have clarity whether SK @ 1.9910 gives way it's a good long trade and once 1.9700 breaks it's great for shorting.:D

Lastly I know you focus on Fibotrading but a cunning observation is that daily price action suggests the possibility of 5 waves down and if 1.9910 holds it could easily target lower prices towards the low 1.90s!!:confused:

In a nutshell I believe in the saying - "RATHER MISS A GOOD THAN BEING IN A BAD TRADE!!"

In retrospect, your comments about the overhead resistance were right on! The big down-move on Feb 1st (intraday) told us what to do after that.

-Neal.

[FibMaster]

The cable has breached the 1.97 (4 hour sk support)!:D On the 1 hour chart, I am looking to short at the one hour resistance at around the 1.976 area or even at the 1.97 area. I would like a deeper retracement to enter. This is of course if the price stands as of now. However, as the down move was so fast it is difficult to find any SKs but I gave it my best shot. In any case, this is my take on the matter. I would appreciate any body elses take on the cable from this point on and their game plan.
Cheers.
:)

I think you've been studying. You sure know how to find SK! It did got to SK resistance and set up some great shorts since then.

I hope you were able to nail those rallies. Did you bank some profits?

-Neal.

[FibMaster]

Here is my recent trade taken on FEb 4 and closed on Feb 5

1. Noticed huge move down on 4 hour chart and bounce off trendline
2. Fib levels put on chart
3. Small rally and fibs placed on that move down
4. Confluence of 38 fib from higher level and 61 from lower plus trendline bounce
5. Entered short
6. 61.8 expansion target...(usually have a 10-15 point buffer on each side when away from computer and use alerts when at home)
7. Bounce close to expansion (3 pips away!!!!) plus trendline.
8. Closed trade for nice profit.

See chart.

I am happy with that trade because I felt I had valid reasons technically to enter and exit.

NB: Also very happy that I reactivated my esignal package. I much prefer this over others.

Yes, a great trade! We can't expect perfection in every trade, and in your case it worked out very well. Keep it up, great work.

Yes Esignal is good. I've used it for so many years now..

-Neal.

[FibMaster]

I am wondering if Fibmaster can clarify if that is a valid SK support.

I saw that on my 4 hour chart but I didn't qualify that bear bar as a valid swing high. In fact, it looks like you have to drop to at least a 15 minute chart (something I don't generally do in forex due to noise) to even get a little hesitation.

HOWEVER....it does play out as SK at much the same level when using fibs on the wave down and the retracement as I have on my posted chart.

I've tried, but I don't really understand your question. I'm not sure which bar you are talking about etc. If you are in my chat/workshop session this Wednesday, let's talk about that (ask me at that time).

-Neal.