The GBP/USD pair is currently trading within an Undefined Price Action/Consolidation Zone, suggesting indecision and reduced momentum. Price has been moving sideways for several days with no clear trend direction. This area typically signals accumulation or distribution before a breakout.
Key Levels Identified
Trade Setup (Bearish Bias Upon Breakout)
Trade Idea
Price is currently ranging but has tested the Support 1 zone multiple times. The more a support level is tested, the weaker it becomes. A clean break below Support 1 (1.32056) would likely signal the end of the consolidation phase and could trigger a strong bearish move. If this breakdown occurs, a short position becomes valid.
Entry
Sell Stop Order below 1.32056 (e.g., at 1.31950) to catch the breakout momentum.
Take Profit (TP)
Primary Target: Support 2 zone between 1.27133 and 1.27173, representing a major historical support level. This provides a potential reward of approximately 480 pips from entry.
Stop Loss (SL)
Placed above recent swing high and resistance of the range: around 1.33034.
Risk is about 90 pips, providing a Risk-Reward Ratio (RRR) of ~1:5 – favorable for short sellers.
Additional Notes
Volume Analysis: Volume appears to have dropped inside the consolidation zone, often indicating a buildup phase. A breakout with rising volume would confirm the trade signal.
Event Risk: UK-related macroeconomic events are marked on May 13 and 15. Monitor for volatility which could trigger the breakout.
Bias: Currently unbiased but leaning bearish due to:
Key Levels Identified
- Support 1 (Breakout Level): 1.32056
- Support 2 (Target Level): 1.27133 – 1.27173 (zone)
- Resistance (Invalidation Zone): Around 1.33034
Trade Setup (Bearish Bias Upon Breakout)
Trade Idea
Price is currently ranging but has tested the Support 1 zone multiple times. The more a support level is tested, the weaker it becomes. A clean break below Support 1 (1.32056) would likely signal the end of the consolidation phase and could trigger a strong bearish move. If this breakdown occurs, a short position becomes valid.
Entry
Sell Stop Order below 1.32056 (e.g., at 1.31950) to catch the breakout momentum.
Take Profit (TP)
Primary Target: Support 2 zone between 1.27133 and 1.27173, representing a major historical support level. This provides a potential reward of approximately 480 pips from entry.
Stop Loss (SL)
Placed above recent swing high and resistance of the range: around 1.33034.
Risk is about 90 pips, providing a Risk-Reward Ratio (RRR) of ~1:5 – favorable for short sellers.
Additional Notes
Volume Analysis: Volume appears to have dropped inside the consolidation zone, often indicating a buildup phase. A breakout with rising volume would confirm the trade signal.
Event Risk: UK-related macroeconomic events are marked on May 13 and 15. Monitor for volatility which could trigger the breakout.
Bias: Currently unbiased but leaning bearish due to:
- Flat momentum within the zone
- Multiple failures to sustain above mid-range
- Potential for breakdown continuation aligned with the higher time frame trend
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Trade forex, indices, stocks and metals with up to US$100.000 in company's funding.
Complete a challenge to access funding or go for instant deposit.
Trading involves substantial risk. Not financial advice
Complete a challenge to access funding or go for instant deposit.
Trading involves substantial risk. Not financial advice
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.