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17.10.2011 04:33 PM
AUD/USD. Weekly and Monthly Pivot Points, For 17 - 21 / October, 2011

Weekly technical levels of the GBP/USD pair.

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Notes:

  • Support: 1.6630
  • Resistance: 1.6870
  • New range: 85 pips.

General overview about pivot points:

  • R3 and S3 are considered to be clear indicators of the maximum range of extreme volatility, though it is possible to pass them through.
  • Pivot lines work well on the sideways markets, as the prices are most likely to be between the R1 and S1 lines.
  • Within a strong trend, the price is expected to be lower than the pivot point line and continue the movement.
  • If the breaking news released affects the market, the price is likely to go straight through R1 or S1 and even reach R2 and R3 or S2 and S3.
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Observations:

  • If the trend is buoyant, then the strength of the currency will be defined as following: GBP is in an uptrend and USD is in a downtrend.
  • Fibonacci retracement is used to determine accurate psychological levels of support and resistance. The period of time should be taken into account.
  • Fibonacci is in a trading range; it looks like the trend is trapping and going up or down. If you sell or buy in the long term, you will surely lose your profit.
  • Stop loss should NEVER exceed your maximum exposure amounts.
  • As a rule, the market is highly volatile if the previous day had huge volatility.
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