GBP/USD 4H Timeframe Analysis

7 дней назад

GBP/USD 4H Timeframe Analysis

Trend Analysis:
On the 4-hour chart, GBP/USD is currently in a downtrend, forming a head and shoulders pattern. The price recently broke through a minor key support, which has now become a minor key resistance at 1.26000. After this break, the price continued downward and then retested this resistance, creating a potential liquidity or manipulation zone.
At present, the price is caught between two minor key levels. Our strategy is to wait for the price to form further liquidity within this zone. This will help us confirm that the price is unlikely to break above our minor key resistance at 1.26000, followed by the trendline in place.

Price Action Expectation:
Once liquidity is formed in the zone, we will monitor for a break below the minor key support at 1.25000. If this happens, we will look for a short entry.

Fundamental Correlation:
The upcoming ISM Services PMI release, scheduled for later today, could significantly impact USD strength. A stronger-than-expected report could bolster the USD, aligning with our bearish view on GBP/USD and potentially driving the price below the 1.25000 support level.
Additionally, the JOLTS Job Openings data, with a forecast higher than the previous report, is expected to provide further support to the USD if it shows positive growth. A stronger job market could push the USD higher, reinforcing the bearish momentum on GBP/USD.

Trade Setup:

Trade Type: Sell Stop (Breakout Trade)
Entry Price: 1.25050 (on confirmation of price breaking below the minor key support)
Stop Loss: 1.26080 (above the resistance level to protect against false breakouts)
Take Profit: 1.22650 (aligned with the next significant support level)

Conclusion: GBP/USD is showing a potential bearish continuation, with the head and shoulders pattern and recent breaks of minor support levels indicating further downside. The upcoming ISM Services PMI and JOLTS Job Openings data could strengthen the USD, supporting our bearish view. Traders should wait for confirmation through the formation of liquidity and a break below 1.25000 before entering a short position.

Risk Management: Ensure a disciplined risk management approach with a 1:2 risk-to-reward ratio. Position sizes should align with account equity, and always monitor price reactions in real-time to validate or invalidate the setup, especially considering the impact of the upcoming economic data.