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.
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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
Below are the monthly imbalances
Firstly using the , 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 .
(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.
Looking to the added to where lies behind the chart candles, the data, which points to a selling opportunity whereby the highest peak of looks to the reaction point upon the entry zone surrounding 1.394XX showing the reactive level at this level which equates to 50% . Shows the clear jostle at a daily imbalance level.
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.
See further for an isolated chart
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