EURUSD
GBPUSD looks very interesting for trade set-ups. I will divide this analysis into 3 sections and correlate them to help us make a better judgment.
We need to always keep an open mind, so I'll add an alternative bias in the end, to have different perceptions.
Section 1
We can see on the chart very clear supply and demand zones, coming after a steep downtrend. Supply and Demand zones can help retail traders identify up coming trends based on institutional money on a chart.
This type of set-up usually indicates short to medium term up side to come, after break of supply zone with clear mitigation of area between.
We need to identify how we can trade it, which takes us to our next step -->
Section 2
Drawing a trend line from the July '23 highs connected to other 2 points, making up 3 mitigations. This clearly shows a down trend broken. Now so, that we are clear, the target for this downtrend line has already reached, but we'll need to keep the trend line for a possible retest of price onto it.
Section 3
Connect the highs and lows of current up trend to help indicate possible turning points in price.
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After done the analysis we have a clear idea of what price might be looking to do in the short-medium term. Let's find possible trade setups.
Price is at no mans land at the moment. If you don't already have a ongoing trade i suggest you wait for confirmation to enter.
How to trade:
Draw the 3 trend lines and 2 zones on your chart and wait for a mitigation of the upward trend lows to enter a 0.5% position, and another 0.5% on the falling trend from July highs. This will help you not enter heavy on any point and have a DCA entry in the middle.
The stop loss can be placed below 1.2035 which is around the local low.
Take profit can be placed above 1.243 which is around current highs.
SL and TP can be placed as comforting, but this set up is easily above RR 3:1 which is very decent.
How to trade part 2:
Let's say price doesn't mitigate the lower trend lines, then you'll need to look for a break and CLEAR RETEST of supply zone to enter a long.
Stop loss would be 1.218
Take profit 1.248
Risk/reward ration would be around 1.5:1
Be very ware and place stop losses. Don't let emotion take over you if it hits.
Price can hit supply zone and go down to demand zone again, even breaking it lower. So trade at your own risk with proper management.
This is my own analysis and everyone who decides to trade this set-up should trade with their own experience and style. Don't jump into trades without experience of how markets might react.
Have good trading day everyone, Thank you.
