The 5%ers' Blog
GBP/USD Price is Established Below The Annual Open Price
A few weeks ago, the GBP/USD price fell below the annual opening price, which became a significant resistance zone.
Since the after three unsuccessful attempts to breakout this resistance. The price reattempted to break the resistance against two days ago (25th June 2019). This time the daily candle ended as a bearish outside bar candlestick pattern, by engulfing the candle of the day before. This candlestick pattern is the first signal to look for a sell position.
In the 1H chart, there are two more signals to look for a sell position on GBP/USD.
- The substantial divergence between the price and the MACD indicator – while the price creates higher highs on its way to reaching the resistance, the MACD creates lower highs.
- When the price hit the resistance, then dropped down and created the outside bar pattern, it also creates a fresh supply, which is the right level to open a sell position if the price retraces there.
The three reasons that we think the GBP/USD remains bearish is because of the confluence of – bearish outside bar pattern, fresh supply, and the MACD divergence which create a reliable and strong setup for the sell position.
In the 1W and 1D charts, it seems that the price will remain bearish until it reaches the 1.2150 zone, which is a support zone.
Therefore, this support zone will be the target of this sell position.
This analysis is relevant for swing forex traders.
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