GBP/USD Intraday Technical Analysis and Trading Recommendations for March 8, 2012

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On the 4H chart we can see the "Head & Shoulders" reversal pattern which was confirmed on Tuesday when the neck-line 1.5790 was broken.

As it was expected, the pattern provided some risk for SELL-deals at 1.5870 level corresponding to the right shoulder which was tested twice this week.

The yesterday's daily low was at 1.5695. However, the expected targets for the confirmed pattern are located at 1.5720,1.5662 and 1.5630 levels.

Also on Tuesday we could observe breakdown of the lower limit of the mid-term bullish channel with obvious bearish price action. This fact may provide the possibility for opening the short position around 1.5790 with potential target seen at level 1.5480.

The GBP/USD pair also has 50% & 61.8% Fibonacci levels located above within the range1.5835 - 1.5865. This point is strongly defended by the bears.

Some profits should be taken at the expected targets. Stop loss should be placed lower near 1.5880, as breakdown of this resistance level invalidates the current bearish scenario and opens the way to the point 1.5970.