GBP JPY - Imbalance pathway to fill

1 нояб. 2022 г.

G'day,

Breakdown:
1. Note
2. Contents
3. Research breakdown
4. Education recap
5. Information on Lupa.

A note before reading - this is a forecast analysis - based upon a long term trading strategy looking for Fresh Demand/Supply zones.
This is tagged Long due to the overall monthly demand in control, until the opportunity of a rejection of the PCP has occurred or a long opportunity from a break and retest of the trend. Overall, where an imbalance is formed and sellers have completed the changing of hands due to purchasing further increments the exhaustive sellers. Until this criteria is met - shorts are held.

Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities. However, note, at current we are awaiting confirmation using daily timeframes for longs towards the target (refer to monthly).

Weekly

• As per previous analysis, GBP JPY pivoted to the weekly and monthly combo demand zone tapping 148.718* - refer to link here: or below. https://www.tradingview.com/chart/GBPJPY/lnvRaiE8-GBP-JPY-Chaotic-moves-approaching/
• The reactive week fell and aligned perfectly to the December 2021 zone where price had closed out all long positions in a drastic sell off. The reason for the weekly zone sell off to this zone is best shown in the monthly zone. Review the monthly below for further clarity. [1]
• Price since the sell off move towards the FL/OL Weekly and Monthly Demand combination - testing the imbalance (proximal line for short profits) has now been reversed and classed as a distal line (for stop losses). The proximal line was broken to the daily timeframe and four hour respectively for loading up on buy positions.
  

Monthly TF for [1] upon closer inspection.


Monthly Timeframe

• Looking left - shows the importance of price action built up from 2012 - August 2015 respectively - this has indicated market top. Using a long term view reviewing market structure, the price action pivot points are clearly displayed below and will be marked (review Figure 2)
• Since the break of structure or (BOS) from July 2020s engulfing departure - GBP began the next cycle of moving towards a short term FL supply flip zone, of which later this zone becomes a CP for a Rally Base Rally (RBR).
  
• Since March 2022 - a new PCP has formed - where the consolidative pattern from February to June 2016 - this has indicated a strong pivot within the curve - acting as a Fresh supply. Where price has formed a bullish candle above 163.8X.
  (Acting confirms are below and outlined from a daily wick which fell to 148.X).
  
  

Figure 2 - 2012 - 2015 Pivot point monthly markup.

Notes
Ellipse 2015 - the marked zone here is where price action has consolidated due to a weekly pivot point hidden with the monthly structure. With this singular candle (inside bar) in this case price will look to the this level for a Potential continuation pattern (PCP) subject to confirms. As a first point of call - the PCP acts as a fresh supply zone. It will pivot to a zone of interest within itself - however this consolidation formation has not occurred out of nowhere.

The reason for this - is to look left back into 2003 - structure here had created a similar price action range which pushed sideways for around 10 months. Having this pivot without any large pivot points to fall back on solidifies the strategy in play of a Monthly time frame referring to - Rally Base Rally scenario.


From here the sell off was imminent from a FL level as the supply is now in control firmly.
Using the FL monthly TF, price needed to break the high curve and generate a break and re-test, this provides a clear monthly confirmation.
The reason why this risk-calculated move is provided is due to a preventative measure for price to penetrate the Supply further.
Reverting to the weekly candlesticks will provide a clearer view of the supply.

Two points of interest show the break of curve upon the weekly for a top of the curve sell.
The second (lower purple curve) shows the overall confirmed second risk adjusted entry or upon the failed break and retest of the supply.


Daily sell breakdown - July 30, 2022 Analysis

• Price has created a fresh Daily supply within the weekly - all though unable to view this formation admittedly, the small Daily anchored move has been added.
  
• A fresh daily supply has been created within the orange box while previously considered a range top - this is a situation where price return with a probability of the lower high wick formed. However to note, where price continues to break the TL - bearish CP (continuation pattern) will form. From here opportunities will highly probable to take price down towards the destination.
  

The current market state - Daily timeframe
Price is showing strong confirmation levels as outlined below - the Demand highlighted between 159-162. The has already created a 'retest' within a weekly candle, so the building up of this zone is already strong and in play.

With reference to the Gap down October 21st - price had tested this level and produced (broker dependent) an equal low or slightly lower low.
Now the formation of this candle the following trading day rejecting the gap- it offered buyers to be present and close out potential short sellers.



Omitted
Trading opportunities for ranges, longs

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