GBPUSD has been spiraling in a higher time frame range. Currently, the market is in a bullish structure on H4, but bearish on daily. The prices and structure is challenging to predict the next move. GBPUSD stands at the resistance level of 1.3630, forming higher highs and higher lows. We will see how market reacts at the resistance level. Price action reflects the bearish pinbar at the resistance. The break of support at 1.3550 will further pressure the bearish move.

We see an ascending channel forming on the prices. The support trendline needs to be pierced in order to trigger further bearish pressure. Even if the trendline is breached, we need the structure to form bearish. This pattern is called ascending penant.

The 75-78.6% retracement level is in confluence with the resistance level. The price of the retracement level is 1.3550 Market may wick till this level and then continue moving down. Even if the resistance level is breached, we should be aware of the fact that the strong retracement level stands there.

EMA 50 has been breached for the bullish side where as, EMA 200 is residing at the resistance level in confluence with other factors. Prices are retesting this current resistance level and tapped the EMA 200. Therefore, another confluence added to our trading plan implies a strong technical point for shorts.

RSI is at 62 levels, which is a bullish region. CCI is at 92, which is also a bullish region. Being in an over bought region, we need to wait for the market to take the pullback/ retracement, in order for the oscillators to neutralize themselves. At the area of our short position, we can easily see what the oscillators would be showing at that time in order to go long. Either the oscillators will be in the bearish region or, they will be in an over bought area.

GBPUSD shorts

Oct 05 2021

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