GBP/USD Intraday Technical Analysis and Trading Recommendations for October 16, 2012 Trend News

The GBP/USD pair reacted strongly towards 1.6300 – 1.6350 zone confirming the bearish retracement scenario expected in the previous weeks.

The bearish Head and Shoulders reversal pattern on the 4H chart, which was confirmed on Friday, enabled 1.6060 level as a full target for the pattern which got hit on Monday with further decline towards 1.6000.

GBP/USD expressed daily closure below the lower limit of the depicted bullish channel which extended the bearish movement towards 1.5970 which has been providing considerable support for the pair so far.

The lower limit of the depicted 4H channel provided considerable support pushing the GBP/USD pair to the upper limit of the bearish 4H channel around 1.6125 where price action should be watched.

A long-term support is seen around the price level of 1.5920 (50% Fibonacci Level). However, the recommended trade is to SELL the pair at retesting of the lower limit of the broken channel around 1.6160 with SL located above 1.6215.

Support: 1.6070, 1.6020, 1.5970, and 1.5920.

Resistance: 1.6125, 1.6160, 1.6260, and 1.6315.

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GBP/USD: Intraday Technical Analysis for October 16, 2012 Trend News

Weekly Pivot Point: 1.6060.

Weekly Pivot Points:



R3: 1.6328

R2: 1.6236

R1: 1.6152

PP: 1.6060

S1: 1.5976

S2: 1.5884

S3: 1.5800

GBP/USD "Pound-Dollar":

Resistance: 1.6150 (sell below this level).

Support: 1.6060 (buy above this level).

Trading Recommendations:



According to the previous events, the price is still between the levels of 1.6055 and 1.6125.



The descending movement will probably be lower than 1.6150 level with the first target at 1.6100 and 1.6050 levels.

Buy deals are recommended above the 1.6060 level with targets at 1.6115 and 1.6150 levels.

Overview:

It should be noticed that the market showed the signs of instability. The trend movement was controversial as it took place in the narrow sideways channel. Due to the previous events, the price is still between the levels of 1.6055 and 1.6125, so it is recommended to be careful while making deals in this area. Therefore, it is necessary to wait till the sideways channel is passed through. Then the market will probably show the signs of a bullish trend. In other words, buy deals are recommended above 1.6060 level with their first target at the level of 1.6100. From this point, the pair is likely to begin an ascending movement to the point of 1.6125 and further to the level of 1.6150. However, if the pair fails to pass through the level of 1.6150, the market will indicate a bearish opportunity below the strong resistance level of 1.6150. In this regard, sell deals are recommended lower than the 1.6150 level with the first target at 1.6100. It is possible that the pair will turn downwards continuing the development of the bearish trend to the level 1.6150 then 1.5980 (the weekly support 1).

If you have any questions or requests, please feel free to contact me: mourad.elkeddani@analytics.instaforex.com.

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GOLD Wave Analysis for October 16, 2012 Trend News

GOLD Elliott Wave

For the last few days Gold was trading in a downward move, developing corrective (c) wave (coloured green) of the bigger (4) wave (coloured orange). Yesterday, during the European session we could observe ascending movement from 1740.90 toward the 1748.26 level. Therefore, during the New York session Gold did not manage to hold this level and price started pushing lower reaching a 1727.98 level. We can consider this move as the end of the 3 impulsive wave (coloured blue). Today this commodity is trading higher and we are expecting to see price around 1728.57 level in the next few days. In accordance with our wave rules and taking into account that the wave 5 should retrace 100% of the wave 4, we can define the potential targets with measuring wave 4, with Take Profit at 1728.57 (100% of wave 4). To reduce the risk, we can use invalidation at 1757.05 level as Stop Loss. Also it is necessary to monitor U.S. Core CPI m/m, CPI m/m, TIC Long-Term Purchases, Capacity Utilization Rate, and Industrial Production m/m data that can change the rate of the pair.

Support and Resistance

(S3) 1701.4 (S2) 1715.5 (S1) 1727.2 (PP) 1741.3 (R1) 1753.0 (R2) 1767.1 (R3) 1778.8

Trading Forecast

Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1746.31 with Stop Loss 1757.05 and Take Profit at 1728.57 are recommended.

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USD/CAD Wave Analysis for October 16, 2012 Trend News

USD/CAD Elliott Wave

Since our last analysis the USD/CAD pair was trading in an upward move, developing corrective wave (2) (coloured green) of the bigger wave (3) (coloured orange). Yesterday, during the Asian and European sessions we could observe descending movement from 0.9810 towards the 0.9768 level. Therefore, during the early New York session this major pair started pushing higher and price retraced back to 0.9810 level. Today the USD/CAD pair finished developing of the (2) wave (coloured green) at 0.9824 level. We are expecting to see price around 0.9706 level soon. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the wave 1, we can define the potential targets with Fibonacci Extensions (0.9834-0.9762-0.9924), with Take Profit at 0.9750 (100% of wave 1) and Take Profit 2 at 0.9706 (161.8% of wave 1). To reduce the risk, we can use invalidation at 0.9835 level as Stop Loss. Also it is necessary to monitor CAD Foreign Securities Purchases, Manufacturing Production m/m and U.S. Core CPI m/m, CPI m/m, TIC Long-Term Purchases, Capacity Utilization Rate, and Industrial Production m/m data that can change the rate of the pair.

Support and Resistance

(S3) 0.9753 (S2) 0.9769 (S1) 0.9779 (PP) 0.9795 (R1) 0.9811 (R2) 0.9821 (R3) 0.9837

Trading Forecast

Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 0.9795 with Stop Loss 0.9835, Take Profit 1 at 0.9695 and Take Profit 2 at 0.9706 are recommended.

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