GBPUSD: Weekly Pullback Exhaustion; Long Term Sell

5 Ağu 2023

Here's my current analysis for GU

Point A: Previous Price Action
On the 4H timeframe, price was in a 23.6% uptrend (that represented the pullback on the daily timeframe).

We were nearing 2 crucial levels - the -27TP1 for the 4H fib and the daily trendline. From this data we can assume that price could undergo a trend reversal at or near one of these points.

We got an 'Overbought' signal on the RSI Indicator and bearish divergence began to form between price action and RSI.

Price hit the -27TP1 and then pushed higher to our daily trendline (red).


Point B: Supply Zone Test and Retest
Price action formed a supply zone at the daily trendline, pushed away and tapped back into it before selling off.

The first impulse formed a 38.2% fib downtrend, price broke and retested the first minor structure trendline and then dropped to our TP1 which coincides with the previously created demand zone and 4H trendline #2.

Point C: Entry #1
Break and retest of the minor structure trendline. Price dropped for 266 pips.

Point D: Fib Completion + Start of New Correction
There were five indications that price would reverse at or near this point:

1. Oversold signal on the RSI Indicator + Bullish Divergence
2. Untapped demand zone
3. Near a 4H trendline
4. Moving average crossover
5. Hit -27TP1 for minor structure fib


Conclusion
Current price is in a pullback on minor structure. I'm waiting on confirmation that this minor structure pullback is over before setting a new fib structure and entering a sell order. For our entry, we can wait for price to break and retest either

1. 4H trendline #1 (Bold Green)
2. Minor structure trendline #2 (Bold black)
3. Minor structure trend continuation trendline (Turquoise)

Because we are in the area where the pullback on the daily timeframe is exhausting, we can assume that this downtrend will continue for quite some time.

I will more than likely take both a long-term and short term position once my confirmations are received.