17.10.201112:30 Forex Analysis & Reviews: GBP/USD: Weekly Tips and Tools/Chart for 17-21 of October, 2011.

Technical levels:

Tip (s):

R₃ and S₃ are good indication for the maximum range for extremely volatile days but can exceeded occasionally.

Pivot lines work well in sideways markets as prices will most likely range between the R₁ and S₁ line.

In a strong trend, price will be low through a pivot point line and keep going.

If there is significant news to influence the market price may go straight through R₁ or S₁ and reach even R₂ & R₃ or S₂ & S₃.

Time Frame: H1

Drag your Fibonacci retracement levels from the lower to the higher of the last week (10 - 14 of October, 2011) in order to determine low and high price.

Average = (Higher - Lower) / 2
Average = 1.5689

50% Fibonacci retracement levels has already formed a strong level at 1.5689.

Volatility:

Variation = Average * (Higher - Lower)

508.32

Observation (s):

If the strength of the trend for pair is an uptrend, then the strength of the currency: GBP is an uptrend and USD is a downtrend.

Most of traders use the Fibonacci retracement to determine accurate psychology level of support and resistance.

Legend:

R: Resistance.
PP: Pivot Point.
S: Support.