GBPUSD | Perspective for the new week for FX:GBPUSD by darcsherry

Despite long-term Bullish expectations on this pair, the Pound appears to be on the verge of a slide amidst Brexit trade deal worries. The identification of reversal candles in the last days of last week trading session is a reflection of the news informing the possibility that the European Union could terminate the post-Brexit trade deal if the U.K.’s disagreement on the Northern Ireland border deepens. Contained within a Descending channel , I look forward to the breakdown of the confluence – Key level @ $1.347500 and Bullish Trendline to short the Pound in the coming week(s).

Tendency: Downtrend ( Bearish )
Structure: Supply & Demand | Descending Channel | Trendline | Reversal pattern ( Double Top )
Observation: i. Since the beginning of the month of October 2021, the Pound rode on a Bullish Trendline to test the $1.38350 zone during last week trading session.

ii. The visual representation of a support line drawn under pivot lows revealed the prevailing direction and momentum of price action in the last three weeks.

iii. However the appearance of a reversal set-up on the lower time frame immediately price hit the $1.385000 zone could be a clue that we might be on the verge of a risk of further decline in price.

iv. Double Top: As stated above, the extremely bearish technical reversal pattern in play after the price reached a peak two consecutive times ($1.38350 & $1.38320 respectively) with a moderate decline between the two highs is awaiting further confirmation in the form of a breakdown of Neckline @ $1.37500 which is also a Key level.

v. In the coming week, it is appropriate that we look out for further confirmation which will happen if the price falls below the confluence of a Key level and bullish trendline @ $1.37500 (Neckline of Double Top ) – a level which also equals the low between the two prior highs.

vi. It is also worthy to state here the significance of the overall Bearish set-up after the price broke below the $1.9500 zone in mid-June 2021. This level later witnessed multiple rejections that sent price spiralling downwards within a descending channel .
vii . Connecting the lower highs and lower lows of price action with parallel trendlines since the beginning of June 2021 is a consolidation phase that reveals an underlying downward trend masked within a Descending channel .

vi. In this regard, I shall be looking forward to taking a short position below the key level @ $1.37500 in the coming week to be on the safe side with an opportunity to add to the existing position at a Breakdown/Retest of $1.36000.
NB: All this been said, it is pertinent to state that if price breaks out of Channel to the upside the narrative so far shall remain invalid as a correction of the Breakout shall signal an opportunity to join a potential rally… Trade consciously!😊
Trading plan: SELL confirmation with a minimum potential profit of 250 pips.
Risk/Reward: 1:4
Potential Duration: 4 to 10days

NB: This speculation might be considered to make individual decisions on the lower timeframe.

Watch this space for updates as price action is been monitored.

Risk Disclaimer:

Margin trading in the foreign exchange market (including commodity trading, CFDs, stocks etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility.

You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment.

I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith.

Past performance is not necessarily indicative of future results.

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