GBPUSD: Good Level For Reversal? Candles Need To Agree.

OANDA:GBPUSD   British Pound / U.S. Dollar
GBPUSD update: Price has pushed below the bullish trend line and has tested the 1.3965 previous low. It went as low as 1.3918 which is not far from the 1.3883 reversal zone boundary. This is an area that I am watching for swing trade longs.

Even though you can make an argument that the current price is within the middle of a very broad range, the fact that there is a reversal zone boundary nearby carries more weight. Understanding context is what allows me to see the greater chance of a bullish retrace in this area.

Any retest of the low 1.3900s or 1.3880 area is the prime area to watch for reversal signals such as a bullish pin bar , or engulfing pattern, etc. The nearest resistance serves as a reasonable swing trade target. 1.4095 is the .382 of the current bearish swing and offers an adequate target if a long signal is taken. Keep in mind, a trade setup is not complete unless a trigger and stop are defined and at this point neither are clear.

If price continues through the reversal zone boundary, I would avoid any swing trade longs until stability returns to this market. Remember the bigger picture ( Elliott Wave chart is on S.C.) implies weakness which means long trades offer less potential in my opinion. More detailed analysis to follow in the analysis area of S.C.
Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)

Great analysis always...
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