There are several reasons why one might believe that GBP/USD will fall after reaching a supply zone:
1. Technical analysis: A supply zone is an area on a price chart where there is a concentration of sellers, leading to an imbalance between supply and demand. When the price reaches this zone, sellers may overcome buyers, leading to a potential reversal and downward movement in the GBP/USD pair.
2. Market sentiment: If the supply zone coincides with negative market sentiment towards the GBP, such as concerns about the UK economy or political uncertainties, it may reinforce the likelihood of a downward movement in the pair. Traders and investors may take advantage of the supply zone to sell GBP/USD, putting additional downward pressure on the pair.
3. Fundamental factors: If there are fundamental factors such as weak economic data or dovish monetary policy signals from the Bank of England, it could increase the probability of a downward movement in GBP/USD after reaching a supply zone.
4. Profit-taking: Traders who have previously bought GBP/USD at lower levels might decide to take profit once the price reaches the supply zone. This selling pressure from profit-taking can contribute to a downward movement in the pair.
1. Technical analysis: A supply zone is an area on a price chart where there is a concentration of sellers, leading to an imbalance between supply and demand. When the price reaches this zone, sellers may overcome buyers, leading to a potential reversal and downward movement in the GBP/USD pair.
2. Market sentiment: If the supply zone coincides with negative market sentiment towards the GBP, such as concerns about the UK economy or political uncertainties, it may reinforce the likelihood of a downward movement in the pair. Traders and investors may take advantage of the supply zone to sell GBP/USD, putting additional downward pressure on the pair.
3. Fundamental factors: If there are fundamental factors such as weak economic data or dovish monetary policy signals from the Bank of England, it could increase the probability of a downward movement in GBP/USD after reaching a supply zone.
4. Profit-taking: Traders who have previously bought GBP/USD at lower levels might decide to take profit once the price reaches the supply zone. This selling pressure from profit-taking can contribute to a downward movement in the pair.