GBP/USD Forecast August 23, 2012, Technical Analysis

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The GBP/USD pair had an extremely bullish session today as the 1.58 level finally gave way. We have now broken down, and should see much higher prices. In fact, we are aiming for the 1.63 level and continue to hold onto this trade until that level gets hit or some kind of drastic change in market sentiment.

If you are a more conservative trader, you could wait for a bit of a pullback, but it seems like that may not happen. This was an extremely explosive move, and as the market has been held below the 1.58 level so vehemently over the last several months, this could have real legs. We only buying this pair now, we do not sell it under any circumstances.

GBP/USD Forecast August 23, 2012, Technical Analysis

GBP/USD Forecast August 23, 2012, Technical Analysis

 

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About: FX Empire Analyst - Christopher Lewis

Christopher is a part of the FXEmpire.com analysis team. He writes Forex and Commodities technical analyses on daily and weekly basis. Christopher writes his analyses in a professional and yet simple to understand manner. His analyses are available in both text and videos.

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Richard

Hello,
I love your short and sweet video reports.
I have a question about the GBPUSD Daily video above for August 23, 2012.
You say you will buy on pullbacks.
Do you mean you will wait for the price action to fall back to a support level,
then buy and keep doing this until you reach 1.63?
Keep up the great work!
Thanks.

Richard

Hello again.
So then I’m assuming a good strategy would be to set a take profit at the next resistance level.
What do you think?

Also, lets say I entered the trade to buy at 1.5880 last night at around 2am EST.
I would then set my stop loss at the yesterdays candles low which is 1.5767 (113 pips loss).
Does this sound reasonable or would you suggest a better approach?

One last thing,
I like to place a channel trend line from the last lowest low and observe.
Should I pay attention to this channel trend line in order to make some moves
or just continue to watch the support and resistance levels to buy and exit?

Again, I love your reports
and I really appreciate your help.

I hope to be financially independent one day… we’ll see.

FX Empire Analyst - Christopher Lewis

I base all of my entries and exits on support and resistance, it seems to work out over the long run. As for the stops, look for a natural support level. I think the 1.57 is the “bottom” of the zone if you will. I think that if we close below that level on a daily candle – the Pound is in trouble.