GbpUsd Statistical Probability With Price Action

Post 19 starts up dated information from last weeks trading.

Post 19 starts up date information for GbpUsd

Column1 shows the number of pips the pound has ranged for the week. For example in column 1 there is the number 231 which means the distance between the high and low for that week was 231 pips. Next to it in column 2 there is the number 29. That tells us that of the 41 trading weeks this year it has moved 231 pips or less 29 times. The 71% in column 3 tells us that there is a 71% statistical probability (SP) of it moving that many pips or less. The yellow area is high (SP) for the weeks range of motion (RM). The green area establishes reasonable expectation and comfort zone for me to trade in. Any time an SP drops below 70% the trade begins to stretch beyond what I call my comfort zone.

Updated info starts on post 19. The weekly charts is showing the gbpusd at a strong resistance level to the top side. Also it is well above the 21em (yellow line) which is a level of support to keep in mind on a correction.

Update info for gbpusd starts with post 19

My strategy for the week based on this chart and high (SP) from a weekly perspective is this. The weekly fibs are main levels of supports marked by the red dots for the GbpUsd. My favorite one is the 50 fib because of its 80% (SP) of being hit. Depending on Price Action (PA) they could be pivot points or points of supports on a downward move. Keeping in mind that 231 weekly range of motion has a SP of 71%. The (WAR) for the year is 285 and the past 5 weeks the weekly RM is 312,334,403,231, and 238. My goal is to capture for the week with the GbpUsd 80 to 150 pips of that weekly move . I trade the EurJpy and GbpJpy too. According to SP the GbpUsd has a high SP of dropping to 2.0405 the weekly 50 fib. Last Friday it closed at 2.0517 which is 135 pips below its record high of 2.0652 and 112 pips above the weekly 50 fib. For me its important to note that after establishing weekly highs and lows it has not retraced to the the 50 fib. If it had retraced to the weekly fib of 50 and already bounced off of it, it would not be a major focus in my trading for this week. My thought is caution toward the top side (which was my thinking with the EurJpy since it was close to its record high http://www.forexfactory.com/showthre...t=50591&page=2 see post 22) until it hits the 50 fib and on the down side looking at PA toward the 50 fib. If it hits 50 fib early in the week I would be looking at possible PA toward the upside with a goal of 150 to 200 pips. On a daily basis it has already retraced to the 50 fib of the daily. See next posts for daily statistics.



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Another way to look at the weekly is it's close is very close to the high of the week. If you look at the weekly chart you will notice that the following weeks bar/candle has price movement well into the body of previous candle/bar. Have not done a an exact analysis of it, just only observation of the charts. The posted chart is an example only, not an indicator of any specific weeks. Candles 2 example is more common then candle 3.

Post 19 starts up date info.

post 19 starts up date info for GU.

Post 19 starts up dated info.

RM for the last 40 days

See post 19 for start of up dated info.

Post 19 starts up dated info.

This is the 15 min chart from last Friday. The GbpUsd after the days high and low were established traced within 5 pips of the 61.8 daily fib. When calculating these daily fib retracements there is a 7 pip tolerance, therefore it is counted as a retracement. For todays trading possible support at the daily fibs from Friday then a push up. As mentioned in previous posts looking at possible downward PA toward the weekly 50 fib of 2.0405 as a weekly support or pivot point. Being cautious not to get hooked in a long trade without it pivoting off of the weekly fib. Not saying I will not go long before that I will just be quick to take profit based on high (SP) for daily range of motion and daily fib retracements. After a couple of days I will be able to look at it from a weekly percpective.

Currently it is finding s/r around last weeks high and the weekly 23.6 fib.

The GbpUsd smashed through all weekly fibs and found support at 2.0258. Trading week of 10/08/07 had a weekly low of 2.0258 and came within 53 pips of 2.0205 the estimated 21ema on the weekly (see post 23). The 2.0290 and 2.0250 has been an area of S/R for the past few weeks. It established a high at 2.0575 for weekly range of motion of 317 pips, which is above the yearly WAR and 5 week WAR, see post 19 and 20 for WAR.

Weekly 21 EMA sets at around 2.0205 look for price action in the gray area based on post 25's analysis and also weekly fib retracements.

Areas of resistance based on daily high, lows, and closes.

These are levels of supports based on weekly fib retracements previous 4hr s/r levels and weekly lows. It's heavy on the top side meaning it is currently 130 pips below the high on 7/24/07 which also is a high that has not been broken since 1981. If the fibs are hit early they can serve as a key pivot point the arrows mark fib levels. The probability percentage shows the likeliness those fib levels will be hit this week. These fib levels are based on last weeks high and low and the percentages are based on these retracement levels being hit after the weeks high and low have been established. Last week the 23.6 fib level was hit and none of the others. So the statistcal probability percentage for the fibs being hit are applicable for this week. When defining the market trend for the week or next few days keep in mind posts 19-22 to gauge areas of entry and profit taking. On a daily basis look at posts 26-30.



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The red letters are the range of motion (RM) statistical probabilities (SP) for the GbpUsd starting the last 85 days. This is when all the currencies (RM) increased. The other percentages are (SP) for the gbpusd's (RM) for all of the year and the last 55 trading days. From a daily perspective the GbpUsd has a high (SP) of (RM) between 80 and 120 pips.

Statistical Probabilities (SP) say down with a (SP) of 97.6% probability of 2.0496 being hit, a 92.7% (SP) of 2.0450 being hit, a 80.5% (SP) of 2.0143 being hit, and a 63.4% (SP) of 2.0377 being hit. The high so far has been 2.0631 which is 21 pips from July high and a 25 year high. All these fibs are with in the yearly (WAR) of 285 and the 50 fib is with in 71% (SP) of a weekly range of 231 pips (see post 22)

On the hourly be looking at a 30 pip drop below the 5/13/21 cross over providing its the right time of the day for continual price action in that direction. Be watching the 4hr SR levels. The green probabilities are based on fib retracements on a daily basis not weekly.

Waiting to see if it breaks below the daily fibs or more up side. Normally wait until 3am to trade this one.
The green fib line is the daily fib and the probability percentages are based on how often it retraces to these levels on a daily basis. Currently is ranging between the 23.6 fib and 50 fib of the daily.

Four hour look with the weekly fibs.