- The GBP/USD pair movement will be continued dropping directly from the level of 1.5635 (50% of Fibonacci retracement levels) in H1 chart. Moreover, this level was confirmed by the bullish market yesterday. Additionally, the price of the GBP/USD pair has been showing a downward trend at the same price which represents the weekly resistance 1 around the area of 1.5651. Therefore, the market will indicate the bearish opportunity at the level of 1.5651. Also, it should be noted that the weekly support became the resistance 1 on December 24, 2014. Accordingly, it will be a good sign to sell at 1.5635 (in the short term) with the first target of 1.5485 in order to form the double bottom and further to 15411 to test the weekly support 1 in H1 chart. Furthermore, it also should be noted that this level of taking profit will coincide with a new bottom, for that it is going to be a good place to take profit. On the other hand, the stop loss should be placed above the weekly pivot point 1.5654 at the price of 1.5682.
- If the trend is buoyant, then the strength of the currency will be defined as following: GBP is in an uptrend and USD is in 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 trading range; it looks like the trend is trapping and going up or down. If you sell or buy in the long term, you will surely lose your profit.
- Stop loss should never exceed your maximum exposure amounts.
- As a rule, the market is highly volatile if the previous day had huge volatility.
The material has been provided by InstaForex Company – www.instaforex.com