Happy start of the week traders! Today we want to share this idea that we find interesting regarding the upcoming behavior of GBP/USD.
🔸We see that the price after bouncing off the resistance zone and breaking the Asecnding Trendline began a consolidation. We were expecting a bearish continuation but it clearly did not happen. On the contrary, the price generated a solid bullish movement, slow, but directional.
🔸Now, this upward movement is approaching a very strong resistance zone, where, during the last years, every time the price approached this zone, it was strongly rejected downwards. Because of this, there is a chance that the same thing will happen this time.
🔸This price level is a large area, which, although there is a bit of distance towards the extreme, at this moment we are practically within the price area (it is not appreciated in the chart, but there is a smaller area in the level current price).
🔸Due to this, we go to a lower timeframe, and we look for what behavior we expect from the price to be able to take a bearish position.
🔸The Ascending Trendline was penetrated to the downside, and the price is on a slightly sideways move. What we are waiting for is a breakout to the downside at the support zone, and then a corrective move in an even lower timeframe (15m-1h).
🔸The movement that we are going to look for is going to be a bearish movement towards the trendline of the structure.
🔸In case the price does not generate this move now, and continues rising, we will continue looking for similar situations throughout the resistance zone. The point of invalidation of the situation will be only in case there is a bullish breakout.
🔸We see that the price after bouncing off the resistance zone and breaking the Asecnding Trendline began a consolidation. We were expecting a bearish continuation but it clearly did not happen. On the contrary, the price generated a solid bullish movement, slow, but directional.
🔸Now, this upward movement is approaching a very strong resistance zone, where, during the last years, every time the price approached this zone, it was strongly rejected downwards. Because of this, there is a chance that the same thing will happen this time.
🔸This price level is a large area, which, although there is a bit of distance towards the extreme, at this moment we are practically within the price area (it is not appreciated in the chart, but there is a smaller area in the level current price).
🔸Due to this, we go to a lower timeframe, and we look for what behavior we expect from the price to be able to take a bearish position.
🔸The Ascending Trendline was penetrated to the downside, and the price is on a slightly sideways move. What we are waiting for is a breakout to the downside at the support zone, and then a corrective move in an even lower timeframe (15m-1h).
🔸The movement that we are going to look for is going to be a bearish movement towards the trendline of the structure.
🔸In case the price does not generate this move now, and continues rising, we will continue looking for similar situations throughout the resistance zone. The point of invalidation of the situation will be only in case there is a bullish breakout.