Gbp/Usd to crash this week (12/02/2011). See supporting details!
The Gbp-Usd closed last trading week on a bearish note (just above a support line), after testing and rejecting highs at 1.5930. The last 3 candles of the trading week showed a strong bearish force in action, and a possibility to do more hike to the downside.
Tuning into the weekly chart, details become a little bit more concrete here as we can see a well formed bearish pinbar, showing strong rejection of key resistance/event area at 1.5930, which also lines in perfectly with the 50% Fib level - giving us a confluence of 2 levels!
Notable is the fact that the dominant trend on the weekly chart is bearish, hence all the bullish move of the past weeks on this pair could be seen as a correction move by the market; since the market does not move in straight lines.
My bias on this pair is that a strong reversal to the down side is imminent given the confluence of so many factors on the weekly chart. My advise will be to look to enter short positions in the coming weeks, if/when next support at 1.5670 fails at holding out price.
Is anyone familiar with the shark formation regarding fibbonaci retracments. I will post exactly what I mean with a chart once I complete the presentation of what I mean. If anyone is familiar with this formation it is appearing on the daily GBP/USD.