Forecast:
- According to the previous events, the price of the GBP/USD pair has still been trapped between 1.5685 and 1.5540.
- The level of 1.5616 represents the weekly pivot point. It should be noted that the weekly pivot point coincides with the ratio of 11% Fibonacci retracement levels on H4 chart.
- Also, it should be noted that the strong reistance had already been placed at the level of 1.5685.
- So, sell below 1.5685 in the long term with the first target of 1.5616, it might resume to 1.5540 (in order to test the double bottom) if the trend will be able to break the double top at 1.6832.
- The stop loss should never exceed your maximum exposure amounts. Thus, it will be rather profitable to set your stop loss at the level of 1.5705.
Review and observations:
- If the trend is of an upside character, then the strength of the currency will be defined as following: GBP is an uptrend and USD is a downtrend. Fibonacci retracement is used to determine accurate psychological levels of support and resistance. The period of time should be taken into account. Fibonacci is in a range trade; it looks like the trend is trapping and going up or down. If you sell or buy for a long term in this period, you will surely lose your profit.
- It should be noted that if there is no significant news to influence, the market price will be moving from pivot point to resistance 1 or support 1. But if there is a significant news, the market price may go straight through resistance 1 or support 1 and reach resistance 2 or support 2 and even resistance 3 or support 3.
The material has been provided by InstaForex Company - www.instaforex.com
