GBPINR ANALYSIS 04.01.2020

GBPINR
Daily chart interpretation 04.01.2020

1. Trend is Bullish inside recent green channel.
2. Price inside the green channel is under correction.
3. Correction trend is predicted to be inside yellow channel or blue channel.
4. Yellow channel is conforming.
5. Blue channel is yet to be confirmed and can be deleted if not confirmed.
6. As it is correction to uptrend, short or long positions can be possible opportunities inside correction channels in smaller time frames especially 1H.
7. Recent candles 30.12.2019 and 01.01.2020 inside the rectangle have tested resistance of yellow correction channel and are trending down.
8. Last candle on 03.01.2019 is blue candle which implies recent support. It can be used to spot correction to downtrend in 1H time frame and decide on entry and exit.

Hourly chart interpretation

Hourly chart interpretation
1. Interpretation of price action inside the yellow and blue major correction channels spotted in daily chart.
2. Price is under correction to downtrend and based on 03.01.2020 support candle spotted on daily chart, correction channel is expected to be inside dark blue channel.
3. Based on price action the downtrend is spotted inside the red channel. However it shall be confirmed only when the price breaks below dark blue correction channel.

Trade setup in Hourly chart
Position type: Sell
Entry: Break below dark blue correction channel
Target: Support trend line of yellow / blue / green channels spotted in daily chart (approx 92.0).
Stop loss: Above recent high

Order cancelled:

Dark blue correction channel in hourly chart acted as strong support. It has also prevented us from taking a premature trade to the downside.

Price action is now testing the resistance line of blue correction channel in daily chart. Lets wait for a pattern to decide on trade setup

Comment:

1. Today's movement validated the resistance lines of both yellow and blue correction channels in daily chart.
2. It has also thrown light into a validated uptrend channel (Pink colored) in hourly chart.
3. Previously predicted dark blue correction channel and downtrend channel in hourly chart were invalidated by price action today.

Trade setup:
Time frame: Hourly chart
Position: Sell
Entry: Break below pint uptrend channel
Target: Support trend line of yellow / blue / green channels spotted in daily chart (approx 92.5).
Stop loss: Above recent high

Trade active:

Entry @ 94.5-94.15
Stop loss: 94.8
Target: Support trend line of yellow / blue / green channels spotted in daily chart (approx 92.5)

Comment:

Downtrend line can be drawn and validated upon break below the blue support line marked "Possible support"

Comment:

Target 1 92.5 achieved

Trade closed: target reached:

Target 2 92.0 reached.