darcsherry

GBPUSD | Perspective for the new week | Follow-up

Short
FX:GBPUSD   British Pound / U.S. Dollar
It has been over 400pips move in our direction since my last publication on this pair (see link below for reference purposes) and it appears we at a critical juncture in the market that warrants a trading opportunity after considering the character of price action during the last week trading session. $1.42000 level "rejected" attempts for a Bullish breakout of Supplication on 4 occasions hereby increasing the option to buy the Greenback in the coming week(s).

Supported by positive US economic data (rebound in US yields and an impressive Markit Manufacturing PMI Flash for May), the Greenback has the potentials to soar across major pairs as I anticipate a Breakdown/Retest of Key level @ $1.41400 to respect Ascending Channel in the coming week(s).

Tendency: Downtrend ( Bearish )
Structure: Supply & Demand | Channel | Reversal pattern ( Double Top ) | Wedge
Observation: i. DOUBLE TOP: The appearance of an extremely bearish technical reversal pattern forming after price attains a peak @ $1.42500 at two consecutive times signals a risk of further decline in the coming week(s).
ii. Despite closing above Key level @ $1.414000 during last week trading session, attempts on a rally continuation was repeatedly rejected by the $1.42000 area hereby giving significance to the Major Supplication area which has a 20-year-old memory (since 2001 - see weekly chart).
iii. As I look forward to the correction phase that will transition into respecting the Ascending channel , the Key level @ $1.414000 remains a yardstick for selling opportunity for me in the coming week.
iv. To buttress my Bearish bias, We can not ignore the appearance of converging trend lines ( Rising wedge pattern) indicated on the chart with two trend lines drawn to connect the respective highs and lows of price action over the last 10days (10th - 21st May 2021) which has a tendency to Breakdown/retest for signal confirmation.
v. Kindly note that
a. Below the Key level remains a confirmation for this set-up to remain valid.
b. Further Breakdown of Ascending channel ($1.39ish) will welcome addition to the position after retest/correction... Trade consciously :)
Trading plan: SELL confirmation with a minimum potential profit of 250 pips.
Risk/Reward: 1:5
Potential Duration: 10 to 20days

NB: This speculation might be considered to make individual decisions on the lower timeframe.

Watch this space for updates as price action is been monitored.


Risk Disclaimer:
Margin trading in the foreign exchange market (including foreign exchange trading, CFDs, etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility.
You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment.
I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith.
Past performance is not necessarily indicative of future results.

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