GBPUSD at crossroads. Possible scenarios
The price of the pair has rejected the descending trendline once again with an engulfing bearish candle. We have two scenarios here :
- Rejection of trendline + engulfing bearish -> We are not in an area of strong support so the price could easily keep falling until the 1.2365 area where support is a lot stronger.
- RSI divergence -> We have an RSI divergence in the D chart. Also we had 3 bullish days in a row so the downward movement yesterday could be a pullback before breaking the descending trend line.
In these cases I like to look at a lower time frame. Lets have a look at the 4H.
We see in the 4H chart that the price is sitting at an area that has been rejected in the recent past 3 times. I will take that support line as reference and if I see a strong bullish movement I will be more inclined to go long. If, on the other hand, I see a break and close below that line I will take the bearish path.
What do you think? Do you think this analysis is correct? Do you have different views? Let me know in the comments
- Rejection of trendline + engulfing bearish -> We are not in an area of strong support so the price could easily keep falling until the 1.2365 area where support is a lot stronger.
- RSI divergence -> We have an RSI divergence in the D chart. Also we had 3 bullish days in a row so the downward movement yesterday could be a pullback before breaking the descending trend line.
In these cases I like to look at a lower time frame. Lets have a look at the 4H.
We see in the 4H chart that the price is sitting at an area that has been rejected in the recent past 3 times. I will take that support line as reference and if I see a strong bullish movement I will be more inclined to go long. If, on the other hand, I see a break and close below that line I will take the bearish path.
What do you think? Do you think this analysis is correct? Do you have different views? Let me know in the comments
Komen:
Price broke the support area and it is heading to our TP target