GBP USD - Sell active using probability
Updated
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
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.
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 falter. Hence a higher sell probability.
Cross-Pair analysis
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.
This stems back to the supply and demand factor from the relevant cross-pair analysis's where imbalances exist for each.
[see analysis below for further clarity].
See the reference using the weekly chart against the EUR USD
Four Hour Chart
See the four hour below;
The pivot points are exactly on the same timeframe, just the fractal differs.
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
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.
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 falter. Hence a higher sell probability.
Cross-Pair analysis
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.
This stems back to the supply and demand factor from the relevant cross-pair analysis's where imbalances exist for each.
[see analysis below for further clarity].
See the reference using the weekly chart against the EUR USD
Four Hour Chart
See the four hour below;
The pivot points are exactly on the same timeframe, just the fractal differs.
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
Note
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.