Given the further consolidation to the upside of the pound sterling against the U.S. dollar, we had to revise our previous analysis and are now seeing a different structure. The bigger picture, however, still remains downside.
To put it in a few words, the structure that could have played out as a reversal moment, consolidated instead as a daily flag, confirming one last movement to the upside, before the short trade we were looking for. It is still unclear if this is an "abc" correction in a regular flat, and the pair is now double topping, or if the pair is forming an expanding flat, and the price will break the previous top at 1.366.
Now it becomes clearer, however, that in the medium picture
GBPUSD
is going to go for one more leg to the upside, before the bigger drop to the downside, making it a 5 wave correction to the upside on the weekly timeframe.
What matters to us now, however, as we are trading step by step on the daily, is that the next expected movement with an excellent profit potential is to the downside ("C" leg of the potential ABC correction). From this moment onwards, therefore, we will be definitely looking for sell setups, also because the weekly upside correction is already completed with it's third wave and is not necessarily going to go for a 5th wave, giving us also a chance that the pair might just drop for the bigger movement. The chances for this are slim, however, and most probably the 5th leg up will happen. In any case, this won't stop us from taking the short trade now, then when the price reaches the lower weekly trend line (in pink), we will see.
If you feel that our analyses and views may be a useful complement to your trading strategies and in order to be notified in real time with our updates on the lower timeframes, please remember to click on the Follow button.
Remember that you can double check the bigger structures that are at play are on the weekly and daily time frames also by scrolling around the charts in the lower 4hr and 60min timeframes (right and left, up and down).
Trade with care and only with a backtested strategy that has proven to work in relation to your invested capital, risk appetite and potential small losses you might incur in before profiting from a good trade.
Thank you for viewing.
To put it in a few words, the structure that could have played out as a reversal moment, consolidated instead as a daily flag, confirming one last movement to the upside, before the short trade we were looking for. It is still unclear if this is an "abc" correction in a regular flat, and the pair is now double topping, or if the pair is forming an expanding flat, and the price will break the previous top at 1.366.
Now it becomes clearer, however, that in the medium picture
What matters to us now, however, as we are trading step by step on the daily, is that the next expected movement with an excellent profit potential is to the downside ("C" leg of the potential ABC correction). From this moment onwards, therefore, we will be definitely looking for sell setups, also because the weekly upside correction is already completed with it's third wave and is not necessarily going to go for a 5th wave, giving us also a chance that the pair might just drop for the bigger movement. The chances for this are slim, however, and most probably the 5th leg up will happen. In any case, this won't stop us from taking the short trade now, then when the price reaches the lower weekly trend line (in pink), we will see.
If you feel that our analyses and views may be a useful complement to your trading strategies and in order to be notified in real time with our updates on the lower timeframes, please remember to click on the Follow button.
Remember that you can double check the bigger structures that are at play are on the weekly and daily time frames also by scrolling around the charts in the lower 4hr and 60min timeframes (right and left, up and down).
Trade with care and only with a backtested strategy that has proven to work in relation to your invested capital, risk appetite and potential small losses you might incur in before profiting from a good trade.
Thank you for viewing.
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