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Cable - 04 Dec 2012

Discussion in 'Nilesh J Patel- Trade Ideas' started by forexlayman, Dec 3, 2012.

  1. forexlayman

    forexlayman Special Consultant to the FPA

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    Forex Layman here with the daily analysis for GBPUSD, Monday 3rd December 2012. As usual I will keep it short, sweet and relevant.



    1. High-impact news releases:



    GBP Manufacturing PMI 49.1 (1 point better than expected)


    USD ISM Manufacturing PMI 49.5 (2 points worse than expected)



    2. Technicals:


    On the daily chart, the 78% retracement has been hit, as is usually the case for Cable. This is using the daily high on 01 Nov, and low on 15 Nov. I've highlighted some key levels on the chart, where I expect the price to move to this week. See the attached image for details.


    041212.JPG

    Today was a bullish breakout above the resistance zone at around 16056. The close at 16116 was +100 pips from yesterday, so the market is moving with conviction. GBP is overbought at this point, but it's still a bullish breakout.


    Plan for 04 Dec 2012


    1. High-Impact News Releases:


    GBP Construction PMI - Expected 50.7


    Manufacturing PMI was better than expected today, so I expect the Construction number to follow suit or meet the forecast. I won't be surprised to see that, so it's not a news release to trade off.


    2. Technicals:


    I will trade the Tokyo - London double time (0700-0800GMT), waiting for a breakout and close above/below the current high or low of the day. Time frame confirmation: D (overall trend), 60M (for fibo, S/R levels), 5M (for execution). Target is to make 20 pips on the breakout, risking 25.


    The market needs to test the support at 16055 at some point, as it has just broken through it. I'm expecting a brief decline in the morning, and the uptrend to resume later on in the day.


    Weekly bias is to buy Cable but only if the market presents a decent opportunity. The most logical target is previous resistance of 16174, which would indicate a 100% retracement from the previous downtrend.



    Work Smart Not Hard.
    Forex Layman
     
    #1 forexlayman, Dec 3, 2012
    Last edited: Dec 3, 2012

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