Weekly technical levels of GBP/USD for February 17-21, 2014

Weekly technical levels of the GBP/USD pair.

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.

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.

The material has been provided by InstaForex Company – www.instaforex.com