GBPUSD | Perspective for the new week | Follow-up details
We are yet to take a position since price action negates the Bearish expectation projected in my last publication on this pair (see link below for reference purposes) as price broke out of the Bearish trendline to find a new high. The current structure appears to have clues that support selling opportunities as the price is at a zone that has accumulated bearish momentum in the past (since February 2021). The appearance of a technical reversal pattern within a major Supplication area ($1.39500/1.40110) that has had a resistance memory since May 2016 (see weekly chart) calls my attention to Bearish tendencies at this juncture in the market.
Despite slumping earlier this week after Fed Chair Jerome Powell said rate increases were "a ways away" and the job market still had "some ground to cover", the bullish momentum garnered on Friday by the USD could be a platform for better days as anticipation of a positive consensus ahead US Nonfarm payrolls release is in the air!
Tendency: Downtrend (Bearish)
Structure: Breakdown | Supply & Demand | Reversal pattern (Double Top) | Trendline
Observation: i. The Greenback resumed recovery with a strong reversal set-up that began on the 21st of July 2021 from the $1.36000 area (see weekly chart).
ii. The line drawn under pivot lows in the last 8 trading days reveals the prevailing direction of participants in the market as price continued to find higher highs.
iii. Double Top: The appearance of an extremely bearish technical reversal pattern within a major Supplication area ($1.39500/1.40110 - see daily chart below) as the price appears to have tested a peak two consecutive times ($1.39830) was later followed by a significant Breakdown of Neckline ($1.39400) on Friday.
iv. I hereby suspect that the early hours/days of the new week might see a price climb to reject neckline to incite a risk of further decline for the Pound in the coming week(s).
v. In this regard, I have identified a niche to go short around $1.39400/1.3900 as a breakdown of Trendline and Key level $1.39850 remains an area to affirm the bearish bias on this pair.
vi. $1.39830 Level - (the peak that formed the Double Top) has a level of significance in my bearish expectations as this level is seen to have a memory of Bearish momentum that garnered over 200pips move in recent times (24th June 2021).
vii. It is worthy to emphasise that the bearish perspective on this speculation could be a correction of the Bullish run that began on the 21st of July 2021 as participants who took advantage of the run take "quick profits" in anticipation of a rally continuation.
viii. This been said, it is appropriate that we put into consideration the possibility of a rally continuation if the price remains above the identified Neckline @ $1.39400... Trade consciously!😊
Trading plan: SELL confirmation with a minimum potential profit of 150 pips.
Risk/Reward: 1:6
Potential Duration: 3 to 7days
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 commodity trading, CFDs, stocks 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.
Despite slumping earlier this week after Fed Chair Jerome Powell said rate increases were "a ways away" and the job market still had "some ground to cover", the bullish momentum garnered on Friday by the USD could be a platform for better days as anticipation of a positive consensus ahead US Nonfarm payrolls release is in the air!
Tendency: Downtrend (Bearish)
Structure: Breakdown | Supply & Demand | Reversal pattern (Double Top) | Trendline
Observation: i. The Greenback resumed recovery with a strong reversal set-up that began on the 21st of July 2021 from the $1.36000 area (see weekly chart).
ii. The line drawn under pivot lows in the last 8 trading days reveals the prevailing direction of participants in the market as price continued to find higher highs.
iii. Double Top: The appearance of an extremely bearish technical reversal pattern within a major Supplication area ($1.39500/1.40110 - see daily chart below) as the price appears to have tested a peak two consecutive times ($1.39830) was later followed by a significant Breakdown of Neckline ($1.39400) on Friday.
iv. I hereby suspect that the early hours/days of the new week might see a price climb to reject neckline to incite a risk of further decline for the Pound in the coming week(s).
v. In this regard, I have identified a niche to go short around $1.39400/1.3900 as a breakdown of Trendline and Key level $1.39850 remains an area to affirm the bearish bias on this pair.
vi. $1.39830 Level - (the peak that formed the Double Top) has a level of significance in my bearish expectations as this level is seen to have a memory of Bearish momentum that garnered over 200pips move in recent times (24th June 2021).
vii. It is worthy to emphasise that the bearish perspective on this speculation could be a correction of the Bullish run that began on the 21st of July 2021 as participants who took advantage of the run take "quick profits" in anticipation of a rally continuation.
viii. This been said, it is appropriate that we put into consideration the possibility of a rally continuation if the price remains above the identified Neckline @ $1.39400... Trade consciously!😊
Trading plan: SELL confirmation with a minimum potential profit of 150 pips.
Risk/Reward: 1:6
Potential Duration: 3 to 7days
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 commodity trading, CFDs, stocks 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.
Comment:
Perspective from the daily chart;
Trade smart. Trade consciously
