The pivot points are important support and resistance levels. It serves to identify whether the price of the pair declines. Thus, the pivot points may quite successfully serve as input and output indicators. The way the pivot points are operated and the strategy is used depend on the type of an investor.
1.6063 and 1.6100 are weekly and monthly pivot points for this week for GBP/USD.
The British pound is the weekly pivot level and is above the 200 day moving average periods (blue). Therefore, the pivot points indicate the following.
Once the pair closes the price on the day above 1.6063 the probability of an upward movement weekly resistance 1.6230 increases.
Below this level a fall to 1.5982 could be activated, making it probable that the support (W_S1) has a strong upward bounce that might have to revert to resistance levels of 1.6230 and 1.6316. Therefore, we recommend buying weekly support levels.
Signals for October 15 – 20, 2012
Buy long if it rebounds around 1.5982, take profit at 1.6149 and 1.6230, and stop-loss is bellow (W_S1).
Buy if it closes above 1.6063 (W_PV), take profit at 1.6230, and stop-loss is 1.6095 (W_S1).
____WEEKLY_____
Weekly - R3 = 1.6316
Weekly - R2 = 1.6230
Weekly - R1 = 1.6149
Weekly Pivot = 1.6063
Weekly - S1 = 1.5982
Weekly - S2 = 1.5896
Weekly - S3 = 1.5815
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_____MONTHLY____
Monthly - R3 = 1.6858
Monthly - R2 = 1.6583
Monthly - R1 = 1.6375
Monthly Pivot = 1.6100
Monthly - S1 = 1.5892
Monthly - S2 = 1.5617
Monthly - S3 = 1.5409
