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The British pound exhibited a firmer tone following the announcement by the Bank of England that it would expand its quantitative easing program by £25B, less than the market consensus of a £50B increase. That fundamental news, in combination with prior visual support, moving averages on multiple time frames, a trendline, and a Fibonacci retracement level, contributed to a trade plan for buying the GBP/USD currency pair soon after the US equity market open. The long trade on cable yielded up …

The US dollar had been mostly range-bound through today’s Asian and London sessions. At the US equity market open, the major stock indexes showed red, and with it came USD strength. The EUR/USD currency pair offered a classic second chance entry after a range breakout move. A 60-pip profit was the reward for traders who let that trade run to the London close, while the cable produced a move roughly double that size.

We found atleast four head and shoulders patterns on the charts today. Watch this video to see how they predicted short trades for the GBP/USD and QMQ8… also known as OIL.

After some quick pre-London pips we found ourselves in a precarious position on the GBP/USD as the London session opened 3am EST. While cable was rising, and paying off on some longs after bouncing on the previous day’s 61.8 Fibonacci level, it was fast approaching the 1.51 area where we also had an overlapping 38.2 Fib level from the recent highs on the 4 hour chart. This was setting us up for a possible double top scenario, with at least 40′ish pips before any support could be found. In …