GBP USD Look at the bigger picture
Purple arrows = resistance
Orange arrows = support
support/resistance level 1.28889
4H CHART - We can see resistance has been used and respected many times and price is currently at resistance level, So most traders would SELL rite?
1D CHART - Price is also at resistance level after respecting it on numerous times, so another SELL rite?
1W CHART - Price is respecting this level again... but as support, hmmmmm I can tell you are now confused and your thinking a SELL signal?
If you said BUY signal then give yourself a pat on the back ( if you are in a field full of cows ) ;p
This is the importance of looking at multiple timeframes on a pairing so you can piece all the bits of the puzzle together and you get an overall clearer picture.
Now then our reasoning for the BUY signal,
4H CHART - The last 2 candles formed were big bullish candles indicating a lot of buying power, enough to smash through this resistance level.
1D CHART - The last daily candle was a big bullish candle that also engulfed ( covered ) the bodies of the previous 2 daily candles BIG BUY SIGNAL, this also indicates that price will smash through resistance.
1W CHART - Last weeks candle closed as bearish but look how big its lower shadow was, price tried to break through our support level and failed to do so, closing above our level, this also is an indication that buying power is strong.
If price manages to break this support then we could see a further push higher and collect some nice pips from this trade.
So all roads lead to a BUY, we will see how this plays out at market open.
Orange arrows = support
support/resistance level 1.28889
4H CHART - We can see resistance has been used and respected many times and price is currently at resistance level, So most traders would SELL rite?
1D CHART - Price is also at resistance level after respecting it on numerous times, so another SELL rite?
1W CHART - Price is respecting this level again... but as support, hmmmmm I can tell you are now confused and your thinking a SELL signal?
If you said BUY signal then give yourself a pat on the back ( if you are in a field full of cows ) ;p
This is the importance of looking at multiple timeframes on a pairing so you can piece all the bits of the puzzle together and you get an overall clearer picture.
Now then our reasoning for the BUY signal,
4H CHART - The last 2 candles formed were big bullish candles indicating a lot of buying power, enough to smash through this resistance level.
1D CHART - The last daily candle was a big bullish candle that also engulfed ( covered ) the bodies of the previous 2 daily candles BIG BUY SIGNAL, this also indicates that price will smash through resistance.
1W CHART - Last weeks candle closed as bearish but look how big its lower shadow was, price tried to break through our support level and failed to do so, closing above our level, this also is an indication that buying power is strong.
If price manages to break this support then we could see a further push higher and collect some nice pips from this trade.
So all roads lead to a BUY, we will see how this plays out at market open.
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