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GBP USD – Here comes a transition of change for FX:GBPUSD by LupaCapital

Hello Traders and Analysts,

A Note before reading – this is a technical breakdown analysis – based upon our trading strategy. This is tagged short, due to selling further increments upon imbalances.

Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.

Breakdown

1. Note

2. Contents

3. Research breakdown

4. Education recap

5. Information on Lupa.

Master Key for zones

Blue = Monthly

Purple = weekly

Red = 4 Days

Yellow = 16 Hours

Orange = Daily

Dark Green = 8 Hour

Grey = 4hour

Pink = 1 hour

Previous Analysis:

Below are the monthly imbalances
Firstly using the monthly timeframe , this has provided two key zones of interests for long positions.
(i) the huge sell off from the US Dollar back in March 2020 provided a key buying imbalance, this had affected the correlation between other pairs against the USD, for example – AUD,NZD,EUR, etc. the swing low formation hit 1.1394X with a sharp whipsaw effect on the monthly timeframe .

(ii) the price reverted back to the original imbalance – to the zone including the psychological 1.40mark.

These established zones are prominent on the chart for two key reasons;

i. price always retests imbalances

ii. where the monthly chart is showing pressure against the GBP creating a lower low pattern through the chart structure historically.

Further Evidence
Looking to the volume profile added to where lies behind the chart candles, the volume data, which points to a selling opportunity whereby the highest peak of volume looks to the reaction point upon the entry zone surrounding 1.394XX showing the reactive level at this level which equates to 50% Fibonacci Retracement . Shows the clear jostle at a daily imbalance level.

Weekly imbalances
The weekly imbalances have been established within the monthly zones – where the use of the Fibonacci pattern has completed.
The selling position in play due to two criteria based upon the weekly see below images to support the probability of sells as the monthly imbalance is within a strong reactive level.

See below for the cross asset-comparison between the following;
EUR USD – Purple
GBP USD – White
USD CAD – Cyan
AUD USD – Dark Blue
The inverse correlation, not causation here shows the negative correlation as opposed to USD CAD.

This stems back to the supply and demand factor from the relevant cross-pair analysis’s where imbalances exist for each.
.
See the reference using the weekly chart against the EUR USD

See further for an isolated chart

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