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Will GBP/USD Breakout the Support? Or, it Will Rise Up From There?

July 20, 2019 | 3:56 pm | The 5%ers' Blog > Trading Room
July 20, 2019 | 3:56 pm
The 5%ers' Blog > Trading Room

A Confluence of MACD Divergence in W1 Chart and Fresh Demand in H1 Chart

Sunday 21/07/2019

If we look at the W1 chart of GBP/USD, we can see the price just arrived into support zone.

The source of this support is a demand level from April 2017.

In December 2018 the price tested this demand twice, and now, it’s the third time the price reaches there.

A demand level that tested a few times becomes a support zone.

Still in the W1 chart, we can see a significant divergence between the MACD indicator and the price lows.

While the price creates a lower low in the W1 chart the MACD creates a higher low.

In the H1 chart, the price created a fresh demand two days ago which is a great demand for buy position.

The target for this buy position is 1.2680.

If the price will breakout the demand there is a high probability it will break also the support on the W1 chart.

In that case, the price most likely will tend to reach the support at the bottom (support 2 at the picture).

This situation can create an opportunity for a sell position and we should look for a price action setup for sell position.

The confluence of MACD divergence on W1 chart and a fresh demand on the H1 chart, convince me that the price had a great chance to rise up from the demand.

But, it always better to be ready for another scenario.

This analysis is relevant for long term forex traders.

 

 

 

 

 

 

 

 

 

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