GBP/USD: Bearish to Bullish Reversal Setup
Here’s a detailed explanation of my GBP/USD analysis on the 1-hour chart:
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The chart highlights key structural points and psychological levels, forming the basis of my trade setup.
Market Structure and Key Levels:
I identified multiple Break of Structure (BoS) points, signaling the continuation of the prevailing bearish trend. However, the marked Change of Character (CHoCH) indicates a potential reversal as price shows signs of transitioning from bearish to bullish momentum. This CHoCH aligns with a demand zone where price reacted strongly, confirming buyers stepping in.
Weekly Psychological Level:
The 1.2600 level is a crucial psychological barrier. Price initially broke below it but retraced to test it as resistance. This level also aligns with my first take-profit zone, making it an ideal spot to secure partial profits if price moves in my favor.
Entry and Execution Plan:
I refined my entry to a 15-minute order block, represented by the $$$ mark. This zone is where price consolidated before a bullish move, signaling institutional participation. My entry at this level offers a low-risk, high-reward opportunity.
Take-Profit Targets:
I set three take-profit levels to align with key liquidity zones:
Take Profit 1: Around 1.26130, just above the psychological level. This is a conservative target to lock in early gains.
Take Profit 2: Positioned near a higher imbalance region, targeting further bullish momentum.
Take Profit 3: The ultimate target, placed at a liquidity zone higher up on the chart. If price maintains its bullish trajectory, this would yield significant profits.
Risk Management:
Stop-loss is set below the demand zone to protect against invalidation of the setup. This ensures my risk remains limited while giving the trade enough room to play out.
Trade Bias:
The bias shifted from bearish to bullish after the CHoCH and the strong reaction from the demand zone. The setup anticipates a retracement or reversal to test higher levels, with the psychological level acting as the first major hurdle.
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This setup is based on market structure, key levels, and price action, offering a clear roadmap for execution. If price respects my zones, it’s a high-probability trade with solid risk-to-reward potential.
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The chart highlights key structural points and psychological levels, forming the basis of my trade setup.
Market Structure and Key Levels:
I identified multiple Break of Structure (BoS) points, signaling the continuation of the prevailing bearish trend. However, the marked Change of Character (CHoCH) indicates a potential reversal as price shows signs of transitioning from bearish to bullish momentum. This CHoCH aligns with a demand zone where price reacted strongly, confirming buyers stepping in.
Weekly Psychological Level:
The 1.2600 level is a crucial psychological barrier. Price initially broke below it but retraced to test it as resistance. This level also aligns with my first take-profit zone, making it an ideal spot to secure partial profits if price moves in my favor.
Entry and Execution Plan:
I refined my entry to a 15-minute order block, represented by the $$$ mark. This zone is where price consolidated before a bullish move, signaling institutional participation. My entry at this level offers a low-risk, high-reward opportunity.
Take-Profit Targets:
I set three take-profit levels to align with key liquidity zones:
Take Profit 1: Around 1.26130, just above the psychological level. This is a conservative target to lock in early gains.
Take Profit 2: Positioned near a higher imbalance region, targeting further bullish momentum.
Take Profit 3: The ultimate target, placed at a liquidity zone higher up on the chart. If price maintains its bullish trajectory, this would yield significant profits.
Risk Management:
Stop-loss is set below the demand zone to protect against invalidation of the setup. This ensures my risk remains limited while giving the trade enough room to play out.
Trade Bias:
The bias shifted from bearish to bullish after the CHoCH and the strong reaction from the demand zone. The setup anticipates a retracement or reversal to test higher levels, with the psychological level acting as the first major hurdle.
---
This setup is based on market structure, key levels, and price action, offering a clear roadmap for execution. If price respects my zones, it’s a high-probability trade with solid risk-to-reward potential.
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