Looking Back...and Forward

Resistence Broken, Further USD Losses?

Looking back into our last trade, shorting GBP/USD, there was a reason we didn't want to put on a full trade. The potential was there but the market decided on a weakening dollar into the new week. We were stopped out at 1.6485 a session later. Looking into this week, the USD will most likely continue to weaken as we've broken several areas of resistence for the EUR$ and GBP$ pairs.

With a lot of economic data coming out on all fronts, we'll look for a fundamentals moving the market with techs supporting. In observance of Independance Day, Saturday July 4th, U.S. markets are closed Friday. Non-Farm Payrolls will be released Thursday instead. This release will most likely set the trend for the following week.

GBP/USD Short

GBP/USD - Technicals point lower
Short @ 1.6366, Stop @ 1.6485, Open Objective

Looking into tonight's London session, we believe the USD will continue to strengthen. There has been a lot of volatility that threw our technicals off the last few days. We're staying away from exposing our account to too much adverse movements until we see a better set-up; however, we are shorting the GBP/USD overnight- playing the fib retracement off the second shoulder of the recent head and shoulders formation. Our target is open, but a move below 1.6250 will make us move the stop to break even along with some profit taking. A further break below 1.6200 opens up a further slide. Our stop is 15 pips above the shoulders, 1.6485. With no major overnight data from the UK, we expect technicals to either work for us, or keep the price stable within the current range.