Being in a bearish trend, GBPUSD has presented a very lucrative bullish setup. This setup would have worked marvels given we were in a bullish trend. Right now, our main focus remains on the bearish side of the pair. We have to avoid trading counter trends being on a swing side of H4.

The market structure of GBPUSD has been bearish since long. The higher timeframes still have room towards the downside for the market to further plummet. LL’s and LH’s have been created and are continuously being created. GBPUSD is at a conventional support level, which we have ignored as no order blocks seem to be here and also the support is for intraday. We will wait for the resistance to be tapped in order to short the market.

GBPUSD is in a descending channel. The upper trendline has been tapped and rejected by the market and printed a bearish candle. This depicts a further fall in the pair. Even if this trendline is broken for the breakout buy, it would need to change the structure before it starts to be bullish again. Therefore, if there is a breakout sell trendline on H1, we will enter shorts again.

At the resistance level of 1.3360, we have a confluence of the golden retracement level of 75-78.6%. This retracement having a confluence on the support level highlights the strength of this region. This retracement completely aligns with the supply zone as well. This supply zone will act as a catalyst for the market to gather liquidity to bring it down.

Both the EMA 50 and EMA 200 are in a bearish sentiment, with a bearish death cross. After the breakout sell of the EMA 50, market was unable to retest at the EMA 50. At the resistance level, we anticipate a retest of the EMA 50. This EMA 50 will give us a second factor for sells.

With the oscillators, both are in the over-sold region. The RSI is at the 34 levels, whereas CCI is at -133. We need to wait for the oscillators to neutralize themselves at the neutral level at the resistance level. From that level, we will have an added confluence of the oscillators to go bearish.

A trapping bullish setup

Nov 25 2021

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