GBP/USD: Intraday Technical Analysis for January 17, 2012.

Pivot Point: 1.5317.

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GBP/USD:

• Resistance: 1.54.
• Breakout above 1.5420 (Buy above this level).
   
• Support: 1.5245.
• Breakout below 1.5225. (Sell below this level).

Trading Recommendations:

According to previous events, the price is still trapped between 1.523 and 1.540.

• Buy above 1.5420 with target at 1.55, then 1.5575.
• Below 1.5225 look for further downside with the first target of 1.5150, 1.51.

Overview:

It should be noted that the market was not stable and the trend was not also clear (it was in a tight sideways range), according to previous events, the price is still trapped between 1.523 and 1.54, so it is wise to be careful in this area. Therefore the first step is to wait for a period of tight sideways range market before breakouts. Then, it is probable that the market will show the signs of a bullish trend. In other words, it will be a good sign to buy above 1.542 (Support 1: 1.5245) with the first target of 1.55 and it'll climb towards 1.545, then to 1.56. However, if the pair does not manage to break through 1.5615, the market will indicate a bearish opportunity below 1.5615 and the level will act as a strong resistance, for that it will be good to sell below 1.56 with the first target of 1.5525 and it will call for downtrend in order to continue bearish trend towards 1.5250. It also should be noted that if there is a breakout at the level of 1.5225, then the trend will continue to be bearish to 1.51.

Intraday Technical levels (the 17^th of January, 2012):

R3:1.5431
R2:1.5393
R1:1.5355
PP:1.5317
S1:1.5279
S2:1.5241
S3:1.5203

Definition (s):

Range I – A long-term mean reversion strategy that looks to go against strong divergence from the pair’s average value. It will typically hold trades for an extended period of time and is one of the slower moving trading strategies.
Range II– Like Breakout 2, uses sentiment as a filter for its trades. It will use a simple oscillator range trading strategy but only take the trading signals if SSI is not at extremes. It is fairly short-term in nature and will tend to trade very little during times of strong trending moves. It is likewise one of the most volatility-sensitive trading systems and will tend to do poorly during times of sharp currency moves.

Observation (s):

Please check out the market volatility before investing, because the sight price may have already been reached and scenarios become invalidate.
Stop Loss should NEVER exceed your maximum exposure amounts.

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