Technical Analysis
In this section, I go over few charts for British pound and explain how they indicate a good probability for the currency to further appreciate against the US dollar. However, in short term, it could pull back 1.6180, 161.40 and 1.6100.
Weekly Chart
Figure 4 depicts a weekly chart for the currency pair GBPUSD after making a high for 2.11598 on 11/09/07, it sold off to a low for 1.35012 on 1/23/09. This was a drop for 36% from it s high. However, the currency pair managed to move back up to 1.70423 on 8/7/09 and then continued to form a consolidation with converging trend lines. This type of formation which resembles a pennant indicates a pause in the price directional move. Furthermore, as the Figure 1 shows, the currency pair has established its upward move by making higher lows and forming accelerating trend lines. Note the slope for trend line C is more than slope for trend line A which indicates market’s velocity and its hurry to take the previous high on 8/7/09. However, if market moves up to that price level, it would make a double top formation which is a facilitator for a sell off. This tendency could be mitigated if the market break out is supported by a surge in trading volume. In other words, a trader should watch this level carefully and follow the volume indicator to gauge an accurate reading on the market upside move. Conversely, one should be careful not to entangled in a fake break out. In that case, the currency pair may initially move up to 1.7455 price level, but then to sell off below the break out price level. Nevertheless, according to the weekly chart in Figure 4, there is a good chance that the GBPUSD currency pair to a higher price level towards 1.67030 and 1.70084.
Figure 4 – GBPUSD weekly chart depicts the possible upside breakout as the end game for the currency price consolidation.
Daily Chart
Glancing at the daily chart in Figure 5, we can denote an upward move which is supported by accelerating trend lines. Note market made a double top formation earlier on 2/7/11 with a high fort 1.62777 which formed a double top with the high on 11/4/10 for 1.62985. Now, it seems the currency pair is posed to break out towards 1.67030 and maybe 1.70084 price levels. Furthermore, note the ascending move of Winning Edge Oscillator (Wes-Osc), a proprietary indicator by Winning Edge System which confirms the probable upward move.
Figure 5 – GBPUSD daily chart shows the possible upside breakout on the third try of 1.6295 price level.
Intraday Chart
The intraday chart for GBPUSD in Figure 6 depicts a different picture for this currency pair as it broke down the support trend line A. Furthermore, a bearish divergence between price bars and Wes-Osc has created a downward move from a high for 1.62622 on 2/18/11. Consequently, we could see further downward moves to 1.6180 and 1.6147 or even 1.6067 price levels. However, note as the chart illustrates the blue painted bars indicate the currency pair is still in its upward trend. In other words, the above- mentioned pull back may provide opportunity for an astute trader to go long.
Figure 6 – GBPUSD 100 minute chart exhibits a different picture, a possible pull back to 1.6180.
According to the techno-fundamental analysis, the British Pound is posed to appreciate against the US dolor. However, in the short term, we could see a pull back to 1.618, 1.6146, and even 1.6067 before it moves up to 16700 and 1.7008 price levels.
For more information about Winning Edge Forex System, please visit www.winningedgeforex.com. Dr. Gandevani’s latest book titled: Winning Edge Trading: Successful and Profitable Short and Long-Term Systems and Strategies, available at Amazon.com provides more detail information for a simple but powerful trading system.
The British Pound’s Upside Breakout, Part II-Technical Analysis by Dr. Ned Gandevani
Technical Analysis
In this section, I go over few charts for British pound and explain how they indicate a good probability for the currency to further appreciate against the US dollar. However, in short term, it could pull back 1.6180, 161.40 and 1.6100.
Weekly Chart
Figure 4 depicts a weekly chart for the currency pair GBPUSD after making a high for 2.11598 on 11/09/07, it sold off to a low for 1.35012 on 1/23/09. This was a drop for 36% from it s high. However, the currency pair managed to move back up to 1.70423 on 8/7/09 and then continued to form a consolidation with converging trend lines. This type of formation which resembles a pennant indicates a pause in the price directional move. Furthermore, as the Figure 1 shows, the currency pair has established its upward move by making higher lows and forming accelerating trend lines. Note the slope for trend line C is more than slope for trend line A which indicates market’s velocity and its hurry to take the previous high on 8/7/09. However, if market moves up to that price level, it would make a double top formation which is a facilitator for a sell off. This tendency could be mitigated if the market break out is supported by a surge in trading volume. In other words, a trader should watch this level carefully and follow the volume indicator to gauge an accurate reading on the market upside move. Conversely, one should be careful not to entangled in a fake break out. In that case, the currency pair may initially move up to 1.7455 price level, but then to sell off below the break out price level. Nevertheless, according to the weekly chart in Figure 4, there is a good chance that the GBPUSD currency pair to a higher price level towards 1.67030 and 1.70084.
Figure 4 – GBPUSD weekly chart depicts the possible upside breakout as the end game for the currency price consolidation.
Daily Chart
Glancing at the daily chart in Figure 5, we can denote an upward move which is supported by accelerating trend lines. Note market made a double top formation earlier on 2/7/11 with a high fort 1.62777 which formed a double top with the high on 11/4/10 for 1.62985. Now, it seems the currency pair is posed to break out towards 1.67030 and maybe 1.70084 price levels. Furthermore, note the ascending move of Winning Edge Oscillator (Wes-Osc), a proprietary indicator by Winning Edge System which confirms the probable upward move.
Figure 5 – GBPUSD daily chart shows the possible upside breakout on the third try of 1.6295 price level.
Intraday Chart
The intraday chart for GBPUSD in Figure 6 depicts a different picture for this currency pair as it broke down the support trend line A. Furthermore, a bearish divergence between price bars and Wes-Osc has created a downward move from a high for 1.62622 on 2/18/11. Consequently, we could see further downward moves to 1.6180 and 1.6147 or even 1.6067 price levels. However, note as the chart illustrates the blue painted bars indicate the currency pair is still in its upward trend. In other words, the above- mentioned pull back may provide opportunity for an astute trader to go long.
Figure 6 – GBPUSD 100 minute chart exhibits a different picture, a possible pull back to 1.6180.
According to the techno-fundamental analysis, the British Pound is posed to appreciate against the US dolor. However, in the short term, we could see a pull back to 1.618, 1.6146, and even 1.6067 before it moves up to 16700 and 1.7008 price levels.
For more information about Winning Edge Forex System, please visit www.winningedgeforex.com. Dr. Gandevani’s latest book titled: Winning Edge Trading: Successful and Profitable Short and Long-Term Systems and Strategies, available at Amazon.com provides more detail information for a simple but powerful trading system.