One of the most interesting pairs gpbusd
Why. Firstly gbpusd has divergent on the monthly non any other pairs with this depth excluding exotic. I hadnt trade them yet. So from the monthly we see gbpusd actually broke out consolation successfully and landed firmly on top of the Weekly POC . breaking years of resistance. Thus resistant and support being equally distributed this effect was a major move that most arenit trainee to noticed So a retracement is expected 600 plus is nothing when breaking out years of consolation on the monthly.
So looking at the force of the sale, candle size shape, depth, and volume of the decline from the weekly to the 4hr. We see divergent in Volume we have larger candles in size full bodies and depth but with no force. Volume didn’t break the ema which is very alarming for a quick bearish response. Also this monthly candle so far is bigger than any other candle and the monthly just started 🤔
This one must remember that the market moves are subtle hunts are aggressive. Also we must remember even though it takes more effort to break highs than lows we still want to see increase in volume on ever move.
So this lack of conviction tells me their an exchange of hands being done.
What is this?
It’s the process when they cause a panic change in market sediment to lure trader to buy or sale a market so in this case they start a sale only to buy the buy order to shake off the buyers in the market cus they want to be the only ones with buy orders. This actions causes the market to rise as the Market goes into the stop losses of the sellers … thus giving the market the gas to break resistance above,
We must remember how price works
1. Price retrace to areas it been restricted from it likes to confront its offender
2. When price break an area and retrace that area now is a weaker resistance area
Now if we fib the swing and the retrace we see that price is at the .6 this is the same area that was resistance for years. This is very bullish despite leaving the poc which is now resistance . If we channel price on the weekly we see that we are at the lower channel in an up trend channel with price resting on the .6. And being a classic abcd move upwards . And finally below is heavily supported s5 pivot and every trader should know you don’t sale into s4 or 5 that’s like driving into a wall doing 100miles/ hr
One must understand how price action occurs in market reversals and this have all the signs of it. It’s very subtle in the new direction So with all this said how we trade this
We wait as we can expect slow movements in a range
We look at the wicks as price moves up and down as they are testing the commitment of the buyers and selling basically they will stop you out if you try to get in before they are ready to move the pair.
We want to see the monthly divergence travel from the lower time frame back up to the daily at price current level and now we can see it on the 4hr with lil movement in price . This is key. Let it build up more on the 4hr and daily as this will clear up the over brought from the weekly.
Thus we must stay away from selling They want more ppl to keep trying to sale and as most who sold n didn’t leave the trade will be in for a lost if they wasn’t in at the start thus it’s not a sell and really not a buy either yet We wait until they make their move
What will be the move,
No matter the direction you have to let the market pullback into the weekly poc as this is still strong resistance !
As the market pull back we can mind that this is a rejection of consolation as the market consolation below for years and on the micro understanding of this it’s called a breakout retest when the market brekouts n retest that breakout. Sound familiar ? Also with the heavy support the chance of a breakout failure is slim.
So in the case how we trade.
We trendline line the decline into the range and wait for price to break to the left of the trendline and exit out the range for a buy. This is the best way to trade this pair as the range is a strong magnet and even tho price is resting on the 6 and all the above the range is stronger and will most likely pull price back
Thus we want to see the range reject price and throw it back up. Thus will be the best time to trade this pair cuz trading it to early is very risk as they are accumulating Their position HOW TO TRADE LIKE THEM –