Analysis of the 4 Hours Chart for
GBPUSD
.
1) Trend Analysis - If we look at the above image, it clearly shows that the pair is in a downtrend. (MAs and the Large Channel prove that).
2) Resistance Analysis - The red-broken horizontal line is a level of importance. The price tried to take support from this level a couple of times but failed miserably, i.e., it didn't make any promising minor high breaks (represented by 2 red down arrows) and also didn't quite make any impressing bull bars (which shows the strength of the bulls at this support is really weak). Furthermore, "Support once broken becomes resistance." The market made new minor lows from those two minor highs which could suggest that the market is acknowledging this level as resistance. The Value Zone provided by the EMAs further strengthens this horizontal level. These EMAs proved to be excellent Value Zones for the price in the past and subsequently made new higher highs and new lower lows by taking supports and resistance respectively from these levels. There is also this minor channel drawn in the chart with blue-dotted lines that gives a trend-line resistance to the price, i.e., making this level more significant. So, we can say that the price is right at the resistance.
3) Candle Analysis - No strong bulls yet. The bull-bars couldn't even muster the power to break a single minor high. This shows us how weak the bulls really are. A big bull bar but no follow-through on closing basis. The big bull bar is making a steep slope (steep slope are always unstable and the price cannot stay at this level for long) which is probably showing that the market is in an OVERBOUGHT zone.
Trade-Ideas:-
a. One can take trades right here thinking that the price is still expensive. ---> Aggressive Approach
b. One can wait for the price to retrace back to those Value Zones, i.e., Trend-line resistance, Horizontal resistance and MA resistance, and then wait for a bearish candlestick signal to ride down the downtrend with a short trade. ---> Conservative Approach
I don't know which one of the above-mentioned approaches is correct. Sometimes the aggressive one is correct, sometimes the conservative approach is the one we should go with, and sometimes both the approaches are proven correct by the market.
Conservative Stops should be above these minor highs @ 1.23850 USD
Targets should be at the next support-levels @ 1.20300 USD or 1.19500 USD
This trade can have a reward – risk ratio of 3 or more if the cards are played right.
For traders who want to know more about my techniques or have any queries, you can chat with me directly through private chats. I will reply you back as fast as I can. Kindly like this post. Also, please do comment in the comment sections below. And I will love it if you follow me.
Thank You!
Disclaimer -
All the ideas posted on these posts are published in good faith and for general educational purposes only. Satx98 does not make any warranties about the completeness, reliability, and accuracy of this information. Any action you take upon the ideas posted by me, is strictly at your own risk. I will not be liable for any losses and/or damages in connection with the use of my ideas.
GBPUSD
.
1) Trend Analysis - If we look at the above image, it clearly shows that the pair is in a downtrend. (MAs and the Large Channel prove that).
2) Resistance Analysis - The red-broken horizontal line is a level of importance. The price tried to take support from this level a couple of times but failed miserably, i.e., it didn't make any promising minor high breaks (represented by 2 red down arrows) and also didn't quite make any impressing bull bars (which shows the strength of the bulls at this support is really weak). Furthermore, "Support once broken becomes resistance." The market made new minor lows from those two minor highs which could suggest that the market is acknowledging this level as resistance. The Value Zone provided by the EMAs further strengthens this horizontal level. These EMAs proved to be excellent Value Zones for the price in the past and subsequently made new higher highs and new lower lows by taking supports and resistance respectively from these levels. There is also this minor channel drawn in the chart with blue-dotted lines that gives a trend-line resistance to the price, i.e., making this level more significant. So, we can say that the price is right at the resistance.
3) Candle Analysis - No strong bulls yet. The bull-bars couldn't even muster the power to break a single minor high. This shows us how weak the bulls really are. A big bull bar but no follow-through on closing basis. The big bull bar is making a steep slope (steep slope are always unstable and the price cannot stay at this level for long) which is probably showing that the market is in an OVERBOUGHT zone.
Trade-Ideas:-
a. One can take trades right here thinking that the price is still expensive. ---> Aggressive Approach
b. One can wait for the price to retrace back to those Value Zones, i.e., Trend-line resistance, Horizontal resistance and MA resistance, and then wait for a bearish candlestick signal to ride down the downtrend with a short trade. ---> Conservative Approach
I don't know which one of the above-mentioned approaches is correct. Sometimes the aggressive one is correct, sometimes the conservative approach is the one we should go with, and sometimes both the approaches are proven correct by the market.
Conservative Stops should be above these minor highs @ 1.23850 USD
Targets should be at the next support-levels @ 1.20300 USD or 1.19500 USD
This trade can have a reward – risk ratio of 3 or more if the cards are played right.
For traders who want to know more about my techniques or have any queries, you can chat with me directly through private chats. I will reply you back as fast as I can. Kindly like this post. Also, please do comment in the comment sections below. And I will love it if you follow me.
Thank You!
Disclaimer -
All the ideas posted on these posts are published in good faith and for general educational purposes only. Satx98 does not make any warranties about the completeness, reliability, and accuracy of this information. Any action you take upon the ideas posted by me, is strictly at your own risk. I will not be liable for any losses and/or damages in connection with the use of my ideas.