Thursday, October 15, 2009

GBP/USD Consolidating in Triangle, Then Thrusts Higher

The GBP/USD looks like it's forming a triangle patter as seen in the 5min chart above. If so, 1.6211 should be broken before a new high. I showed you the longer term outlook for the GBP/USD a couple posts ago; it's bearish. However in the short term it's possible higher levels will be achieved. For short term players, the long side might be wise with a 1.6211 stop. Once the thrust to a new high occurs, protect profits by moving the stop loss to break even. Then trail the stop higher until stopped out. Don't get greedy, triangles are terminal moves and are quickly reversed once they've topped.

I closed my long position this morning at over a 200 pip profit. No need to hold onto that one after such a nice run. I'm looking for signs of a top so I can go aggressively short with a stop above 1.6744. But in the very short term, it seems that the pair has more upside.

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