8/27/2008

Trade # 16: GBP/USD Long

I am going long GBP/USD @ 1.8340 with a stop @ 1.8260. My target is around 1.8800 or higher.

As you can see above, there is a nice 5-wave decline on the 8hr chart. Wave-v is forming as an ending diagonal, and MACD/RSI divergence is apparent.

The 1hr chart highlights the ending diagonal more clearly. The decline has been choppy and overlapping, with divergences forming against each succesive low. I am taking a long trade with a stop below the 5th leg of the diagonal. Hopefully this level holds.

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