GBPUSD recently broke out of its 1D descending parallel channel, which seems to be a bullish flag, it then re-tested the channel thrice with the last 1D candle closing as a bullish spinning top.
1D Analysis
The Friday candle closed as a bullish spinning top after its retest of the 1D descending parallel channel, this could be a possible indication for a reversal to the sell trend prior to the bullish spinning top.
A successful bullish spinning top might create a possibility where the pair heads to re-test the 1D disjoint channel resistance as it did prior to it starting the sell trend. This would however require the 1D candle to close above the support turned resistance of the disjoint channel as it closed on the support when retesting the descending parallel channel.
4H Analysis
The pair closed its last 4H candle as a doji after testing the support zone it had trouble breaking below. This might be the indication that the pair is uncertain about breaking below the zone. The pair can be seen within another descending channel on the 4H timeframe.
A break below the support zone could lead to a further sell-off on the pair, but for the 1D bullish spinning top to be valid it would need to break the zone of its last lower high.
1H Analysis
The pair closed its last 1H candle as an inverted hammer which might be another indication to confirm the 1D bullish spinning top, but the previous candle closed as a bearish spinning top which indicates that the pair might drop. The possibilities are that the bearish spinning top might be to drop the pair towards the support zone where it might be able to gain some momentum before rallying all the way back up, or it might just break below the support zone and continue with its sell-off. Another possibility might be that the inverted hammer invalidates the bearish spinning top and the pair breaks the resistance zone then gaining momentum to carry on with a rally.
Conclusion
Monitor the pair on the 1H timeframe to see exactly what the pair does and how it coincides with the 4H and 1D in order to make an accurate trading decision.
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1D Analysis
The Friday candle closed as a bullish spinning top after its retest of the 1D descending parallel channel, this could be a possible indication for a reversal to the sell trend prior to the bullish spinning top.
A successful bullish spinning top might create a possibility where the pair heads to re-test the 1D disjoint channel resistance as it did prior to it starting the sell trend. This would however require the 1D candle to close above the support turned resistance of the disjoint channel as it closed on the support when retesting the descending parallel channel.
4H Analysis
The pair closed its last 4H candle as a doji after testing the support zone it had trouble breaking below. This might be the indication that the pair is uncertain about breaking below the zone. The pair can be seen within another descending channel on the 4H timeframe.
A break below the support zone could lead to a further sell-off on the pair, but for the 1D bullish spinning top to be valid it would need to break the zone of its last lower high.
1H Analysis
The pair closed its last 1H candle as an inverted hammer which might be another indication to confirm the 1D bullish spinning top, but the previous candle closed as a bearish spinning top which indicates that the pair might drop. The possibilities are that the bearish spinning top might be to drop the pair towards the support zone where it might be able to gain some momentum before rallying all the way back up, or it might just break below the support zone and continue with its sell-off. Another possibility might be that the inverted hammer invalidates the bearish spinning top and the pair breaks the resistance zone then gaining momentum to carry on with a rally.
Conclusion
Monitor the pair on the 1H timeframe to see exactly what the pair does and how it coincides with the 4H and 1D in order to make an accurate trading decision.
If you liked this analysis make sure to give us a thumbs up, leave us a comment and make sure to follow us for future ideas 👍❤
