The pivot points are important support and resistance levels. It serves to identify whether the price of the pair declines. Thus, the pivot points may quite successfully serve as input and output indicators. The way the pivot points are operated and the strategy is used depend on the type of an investor.
1.6060 and 1.6100 are weekly and monthly pivot points for this week for GBP/USD.
The British pound is bellow the weekly pivot level and is above the 200 day moving average periods (blue). Therefore, the pivot points indicate the following.
Once the pair closes the price on the day above 1.6063 the probability of an upward movement weekly resistance 1.6242 increases.
Below this level a fall could be activated to 1.5941, making it probable that the support (W_S1) has a strong upward bounce that might have to revert to resistance levels of 1.6123 and 1.6242. Therefore, we recommend buying weekly support levels.

Signals for October 22 – 27, 2012

Buy long if it rebounds around 1.5941, take profit at 1.6060 and 1.6242, and stop loss is bellow (W_S1).

Buy if it closes above 1.6060 (W_PV), take profit at 1.6242, and stop loss is bellow 1.5941 (W_S1).

____WEEKLY_____
Weekly - R3 = 1.6305
Weekly - R2 = 1.6242
Weekly - R1 = 1.6123
Weekly Pivot = 1.6060
Weekly - S1 = 1.5941
Weekly - S2 = 1.5878
Weekly - S3 = 1.5759

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 _____MONTHLY____
Monthly - R3 = 1.6858
Monthly - R2 = 1.6583
Monthly - R1 = 1.6375
Monthly Pivot = 1.6100
Monthly - S1 = 1.5892
Monthly - S2 = 1.5617
Monthly - S3 = 1.5409