GBP/USD: Intraday Technical Analysis for January 27, 2012.

Pivot Point: 1.5695.

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GBP/USD:

• Resistance: 1.575. (Sell below this level).
• Support: 1.55. (Buy above this level).
  

Trading Recommendations:

According to the previous events, the price is still located between levels1.5750 and 1.55.

• BUY-deals are to be made higher than the 1.55 level with targets at levels 1.5525 and 1.5675.
• The descending movement will probably take place lower than the 1.575 level with the first targets at levels 1.5653, 1.559 and 1.5465.

Overview:

It should be noted that the market revealed the signs of instability and the trend movement was controversial as it took place in a narrow sideways channel. Concerning the previous events, the price is still between the levels 1.5750 and 1.5400, so it is recommended to be careful in this area. Therefore, it is necessary to wait till the sideways channel is passed through. Then, the market will probably show the signs of a bullish trend. In other words, BUY-deals are recommended higher than the 1.5400 level (Support 3: 1.5469) with its first target at level 1.55. From this point the pair is likely to begin the ascending movement to the point 1.56 and later to 1.5675. However, if the pair is not to pass through the level 1.5750, the market will indicate a bearish opportunity lower than the strong resistance level 1.5750. In this regard, it is recommended to make SELL-deals lower than the 1.5750 level with the first target of 1.56. It is possible that the pair will turn to downward movement continuing the development of the bearish trend to the level 1.555.
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Intraday Technical levels (the 27^th of January, 2012):

R3:1.5804
R2:1.5769
R1:1.5730
PP:1.5695
S1:1.5656
S2:1.5621
S3:1.5582

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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