(for large size image go here http://i62.tinypic.com/1g11q8.jpg
There are many “professional” traders who offer expensive teaching courses yet steadfastly refuse to prove they make a profit trading forex by opening their books to examination through myfxbook for example.
Some of these traders claim never to look at a smaller time frame than the 4hours chart and boast that they generally trade off the 1 day chart with no indicators relying purely on “price action” to determine a possible trade.
This is nonsense.
There are certain indicators that are ESSENTIAL on every chart and price action is completely invisible on time frames greater than 1 hour.
True price action can only be seen on the 1 minute chart and I shall explain why this at another time.
Currently the BULLS and the BEARS are at war on GBP/USD.
This war will shortly intensify. No-one knows when. Its possible this will happen at 15:00 when US New Home Sales come but if it doesn’t then its likely to be later this evening or tomorrow morning.
Hopefully it will be this evening and I shall do a video explaining whats happening but for now I give some general pointers.
The 1hour chart above clearly shows the battle between the Bulls and the BEARS.
The 76.4 resistance at 1.6413 has been tested 4 times and on each occasion the BULLS have been repulsed. Every time this happens the line weakens.
The 100 SMA is supporting the BULL charge. Beneath the 100 sma is more support for the BULLS so the BEARS are in trouble.
The BULLS are likely to break this fib resistance at some time in the near future. If it doesn’t happen at 15:00 at we get a USD favourable print then the BULLS may have to retreat to regroup but eventually I expect 1.6413 to give way.
When it does we could see a spike up as the BEARS defenses collapse and they retreat to 1.6453