GBP USD - Testing a crucial zone - November update
Hello Traders and Analysts,
A Note before reading - this is a technical breakdown analysis - based upon our trading strategy. This is tagged short, due to selling further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
Breakdown
1. Note
2. Contents
3. Research breakdown
4. Education recap
5. Information on Lupa.
Master Key for zones
*Blue = Monthly
*Purple = weekly
*Red = 4 Days
*Yellow = 16 Hours
*Orange = Daily
*Dark Green = 8 Hour
*Grey = 4hour
*Pink = 1 hour
Risk Warning
Trading leveraged products such as Forex, commodities and CFDs, carries with it a high level of risk and so may not be suitable for every investor. Prior to trading the foreign exchange, commodity or CFD market, consider your investment objectives, level of experience and risk appetite. You should never risk more than you can afford to lose. If you fail to understand or are uncertain of the risks involved, please seek independent advice and remember to conduct due diligence.
Previous Analysis
Monthly Imbalance
Below are the monthly imbalances
Firstly using the monthly timeframe, this has provided two key zones of interests for long positions.
(i) the huge sell off from the US Dollar back in March 2020 provided a key buying imbalance, this had affected the correlation between other pairs against the USD, for example - AUD,NZD,EUR, etc. the swing low formation hit 1.1394X with a sharp whipsaw effect on the monthly timeframe.
(ii) the price reverted back to the original imbalance - to the zone including the psychological 1.40mark.
These established zones are prominent on the chart for two key reasons;
i. price always retests imbalances
ii. where the monthly chart is showing pressure against the GBP creating a lower low pattern through the chart structure historically.
The structure Indicates all in a clear move.
Profit zones in terms of adding the red dotted line, indicates where measured sells will be closed out.
Weekly imbalances
The weekly imbalances have been established within the monthly zones - where the use of the Fibonacci pattern has completed.
The selling position in play due to two criteria based upon the weekly see below images to support the probability of sells as the monthly imbalance is within a strong reactive level.
Using the Fibonacci based upon the market structure - price has completed the 1.618 extension target or if using the inverse method -0.618 target. Once the established high is deemed, the weekly structure is formed from the far left - showing the weekly sell candle rejecting the imbalance top closing out the previous high of the structure. The reversion back into the monthly zone offers a sell position to be placed capturing the move. Price had retested this zone again failing to extend the buying imbalance to create a second block. Instead, the lower high suggests price will continue to faulter. Hence a higher sell probability.
Moving to where we are now using the weekly.
Based on the above and previous analysis update, we have seen tremendous growth in terms of selling off as a bearish imbalance.
Price has double bottomed upon the "Fibonacci 0" which aligns to the imbalance upon the weekly candle as shown in the purple zone.
Price can reject immediately as the zone is strong, however the probability of price to overextend to the -0.27 or reject in between upon the body of the weekly bearish inside candle (looking left) this is a highly probable zone to change hands.
8 Hour view & 16hour view
the 8 hour time session provides a clear impulse, correction and impulse time and time again in this trade, offering multiple tops to sell from and if looking to hedge, buying opportunities which are presented too.
The pivot points of said correctional moves have created lower high formations upon the Fibonacci sequence which given probability of using "falling, to the right" approach, then the trend is showing where price is looking to take us, ideally walking down.
Zoom into the 1hour and 15mins for precise entries, although it's not about this, the overall idea is to use risk management and keep stop losses out of reach to allow price to breath on the original move.
16 hours before
See the 16hour analysis to assist further;
This lays down to the four hour chart too, consisting of the same pattern
16 hours after
A four hour view
The four hour view provided a clear
See below for the cross asset-comparison between the following;
EUR USD - Purple
GBP USD - White
USD CAD - Cyan
AUD USD - Dark Blue
The inverse correlation, not causation here shows the negative correlation as opposed to USD CAD.
Please note* I'm not tracking this any further as the shift of weak GBP and Strong AUD & CAD no longer aligned with asymmetrical movements.
Commodity moves have raised the state of AUD, CAD respectively towards correctional tests upon imbalances.
Do you enjoy the setups?
*Professional analyst with 5+ years experience in the capital markets
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
LVPA MMXXI
A Note before reading - this is a technical breakdown analysis - based upon our trading strategy. This is tagged short, due to selling further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
Breakdown
1. Note
2. Contents
3. Research breakdown
4. Education recap
5. Information on Lupa.
Master Key for zones
*Blue = Monthly
*Purple = weekly
*Red = 4 Days
*Yellow = 16 Hours
*Orange = Daily
*Dark Green = 8 Hour
*Grey = 4hour
*Pink = 1 hour
Risk Warning
Trading leveraged products such as Forex, commodities and CFDs, carries with it a high level of risk and so may not be suitable for every investor. Prior to trading the foreign exchange, commodity or CFD market, consider your investment objectives, level of experience and risk appetite. You should never risk more than you can afford to lose. If you fail to understand or are uncertain of the risks involved, please seek independent advice and remember to conduct due diligence.
Previous Analysis
Monthly Imbalance
Below are the monthly imbalances
Firstly using the monthly timeframe, this has provided two key zones of interests for long positions.
(i) the huge sell off from the US Dollar back in March 2020 provided a key buying imbalance, this had affected the correlation between other pairs against the USD, for example - AUD,NZD,EUR, etc. the swing low formation hit 1.1394X with a sharp whipsaw effect on the monthly timeframe.
(ii) the price reverted back to the original imbalance - to the zone including the psychological 1.40mark.
These established zones are prominent on the chart for two key reasons;
i. price always retests imbalances
ii. where the monthly chart is showing pressure against the GBP creating a lower low pattern through the chart structure historically.
The structure Indicates all in a clear move.
Profit zones in terms of adding the red dotted line, indicates where measured sells will be closed out.
Weekly imbalances
The weekly imbalances have been established within the monthly zones - where the use of the Fibonacci pattern has completed.
The selling position in play due to two criteria based upon the weekly see below images to support the probability of sells as the monthly imbalance is within a strong reactive level.
Using the Fibonacci based upon the market structure - price has completed the 1.618 extension target or if using the inverse method -0.618 target. Once the established high is deemed, the weekly structure is formed from the far left - showing the weekly sell candle rejecting the imbalance top closing out the previous high of the structure. The reversion back into the monthly zone offers a sell position to be placed capturing the move. Price had retested this zone again failing to extend the buying imbalance to create a second block. Instead, the lower high suggests price will continue to faulter. Hence a higher sell probability.
Moving to where we are now using the weekly.
Based on the above and previous analysis update, we have seen tremendous growth in terms of selling off as a bearish imbalance.
Price has double bottomed upon the "Fibonacci 0" which aligns to the imbalance upon the weekly candle as shown in the purple zone.
Price can reject immediately as the zone is strong, however the probability of price to overextend to the -0.27 or reject in between upon the body of the weekly bearish inside candle (looking left) this is a highly probable zone to change hands.
8 Hour view & 16hour view
the 8 hour time session provides a clear impulse, correction and impulse time and time again in this trade, offering multiple tops to sell from and if looking to hedge, buying opportunities which are presented too.
The pivot points of said correctional moves have created lower high formations upon the Fibonacci sequence which given probability of using "falling, to the right" approach, then the trend is showing where price is looking to take us, ideally walking down.
Zoom into the 1hour and 15mins for precise entries, although it's not about this, the overall idea is to use risk management and keep stop losses out of reach to allow price to breath on the original move.
16 hours before
See the 16hour analysis to assist further;
This lays down to the four hour chart too, consisting of the same pattern
16 hours after
A four hour view
The four hour view provided a clear
See below for the cross asset-comparison between the following;
EUR USD - Purple
GBP USD - White
USD CAD - Cyan
AUD USD - Dark Blue
The inverse correlation, not causation here shows the negative correlation as opposed to USD CAD.
Please note* I'm not tracking this any further as the shift of weak GBP and Strong AUD & CAD no longer aligned with asymmetrical movements.
Commodity moves have raised the state of AUD, CAD respectively towards correctional tests upon imbalances.
Do you enjoy the setups?
*Professional analyst with 5+ years experience in the capital markets
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
LVPA MMXXI
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