This is why GBP/USD is Extremely Bullish - Multi Timeframe
Good morning traders, today we will analyze GBP/USD with a detailed explanation of why we consider that this pair is in a clear uptrend, and its potential is not over yet.
This pair has been interesting in recent weeks, since it has been on a consolidation/corrective move for almost two months. Given this behavior, the best thing to do is to analyze a high timefarme so as not to lose perspective of the general movement of the pair. Many times it happens that we go to lower timeframes to look for short-term trades, and since there is no trend, our analysis end up being erratic.
We must know when NOT to trade, and stay on the sidelines until we see a favorable scenario. You need to know that many times the fact of not losing money implies a gain, and this may be that situation.
Now let's talk a little about the chart:
🔸The trend is undeniably bullish. A marked channel, with increasing highs and lows. Something that we can all see clearly.
🔸A confusing event that happened was the breakout of the Ascending Trendline, which may have led many traders to take bearish positions. The problem here is that the price failed to create a downward movement below, and just kept consolidating.
🔸As we always trade in the direction of the trend, we will analyze the price to find out how we can catch the next trend continuation if it happens.
For this, we decrease the timeframe to 4H:
🔸In this chart, we draw a corrective pattern in which we see that it was broken to the upside, which is a good bullish sign. Let's not forget that the price is still outside the daily bullish channel.
🔸Given the previous situation, we consider it prudent to wait for a bullish breakout of the range, above the 1.4000 area, and consider a bullish trade there.
Another way to see the correct or corrective movement is the following:
🔸There is a behavior called rounded bottom, where the price generates lower highs and lows, until it finds a bottom. From then on, the following highs and lows are no longer decreasing, but they begin to increase. That is the behavior that we are witnessing right now.
🔸In either scenario, the situation is the same. We need the breakout of the range.
🔸If that happens, what we are looking for is a retest / throwback to the broken zone and a clear rejection. If we see that behavior, it will be time to consider a bullish position.
This pair has been interesting in recent weeks, since it has been on a consolidation/corrective move for almost two months. Given this behavior, the best thing to do is to analyze a high timefarme so as not to lose perspective of the general movement of the pair. Many times it happens that we go to lower timeframes to look for short-term trades, and since there is no trend, our analysis end up being erratic.
We must know when NOT to trade, and stay on the sidelines until we see a favorable scenario. You need to know that many times the fact of not losing money implies a gain, and this may be that situation.
Now let's talk a little about the chart:
🔸The trend is undeniably bullish. A marked channel, with increasing highs and lows. Something that we can all see clearly.
🔸A confusing event that happened was the breakout of the Ascending Trendline, which may have led many traders to take bearish positions. The problem here is that the price failed to create a downward movement below, and just kept consolidating.
🔸As we always trade in the direction of the trend, we will analyze the price to find out how we can catch the next trend continuation if it happens.
For this, we decrease the timeframe to 4H:
🔸In this chart, we draw a corrective pattern in which we see that it was broken to the upside, which is a good bullish sign. Let's not forget that the price is still outside the daily bullish channel.
🔸Given the previous situation, we consider it prudent to wait for a bullish breakout of the range, above the 1.4000 area, and consider a bullish trade there.
Another way to see the correct or corrective movement is the following:
🔸There is a behavior called rounded bottom, where the price generates lower highs and lows, until it finds a bottom. From then on, the following highs and lows are no longer decreasing, but they begin to increase. That is the behavior that we are witnessing right now.
🔸In either scenario, the situation is the same. We need the breakout of the range.
🔸If that happens, what we are looking for is a retest / throwback to the broken zone and a clear rejection. If we see that behavior, it will be time to consider a bullish position.
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